Santos will invest about $160 million net in a brownfield project linking the Agogo Production Facility to the existing PNG LNG gas pipeline via a new 19-kilometer pipeline, two wells, and facility modifications. Gross capital expenditure is estimated at $400 million over three years.
The project is expected to add around 135 mmscf/d of production capacity, with Santos’ net share at roughly 54 mmscf/d. Santos said the development is expected to deliver an IRR above 50% and a payback period of less than four years from FID.
The project is designed to sustain feed gas supply into PNG LNG by using existing processing and export infrastructure, limiting the need for major new downstream investment. Santos said the development will convert 66 mmboe of 2P undeveloped reserves into developed reserves and support a production plateau of around 12 years, with potential output beyond 2050.
The decision comes as LNG producers seek lower-risk brownfield expansions to maintain export volumes amid strong long-term Asian gas demand. PNG LNG remains one of Papua New Guinea’s flagship energy assets, with Santos holding a 39.9% interest alongside ExxonMobil PNG, ENEOS Xplora, Kumul Petroleum, and the Mineral Resources Development Company.
By Charles Kennedy for Oilprice.com