Santos Secures $US800 Million Financing for Darwin LNG Upgrade to Process Barossa Gas

2 min read | October 10, 2024 07:16 PM AEDT | By Team Kalkine Media

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Santos Secures $US800 Million Financing for Darwin LNG Upgrade to Process Barossa Gas — Image source: shutterstock

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Highlights:

Santos Limited (ASX:STO) and partners secure $US800 million in loans to upgrade the Darwin LNG facility.

The financing includes two loans: a $US350 million, seven-year loan maturing in 2031 and a $US450 million, 12-year loan maturing in 2036.

The Darwin LNG plant upgrade aims to process gas from the Barossa field, supporting the transition to renewable energy.

Santos Limited (ASX:STO) and its partners in the Darwin LNG venture have successfully secured $US800 million in loans to fund the upgrade of their liquefaction facility. This development is pivotal for processing gas from the Barossa field, located in the Timor Sea, ensuring the continued operation of the Darwin LNG plant.

The financing consists of two key components: a $US350 million, seven-year loan that matures in 2031, and a $US450 million, 12-year loan set to mature in 2036. These loans are crucial for advancing the revamp of the Darwin LNG facility, which previously processed gas from the now-depleted Bayu-Undan field. The upgrade is designed to transition the plant to process gas from the Barossa field, ensuring the site's future viability.

Despite the growing reluctance of some financial institutions to back fossil fuel projects, Santos has noted strong support from both existing and new lenders. While specific lender names were not disclosed, the confidence shown by these financial entities underscores the vital role natural gas continues to play in supporting the transition to renewable energy sources.

The upgrade of the Darwin LNG plant is scheduled for completion by mid-2025, a timeline confirmed by Santos CEO Kevin Gallagher. The project aligns with broader energy market shifts, as gas is increasingly recognized as a necessary transition fuel, helping to bridge the gap between traditional fossil fuels and emerging renewable tecnologies.

This funding marks a significant step in ensuring the future of gas processing at the Darwin LNG facility, positioning Santos and its partners to meet the ongoing energy demands while adapting to a changing energy landscape.

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