Santos has announced a final investment decision (FID) to proceed with the Agogo Production Facility (APF) Tie-In Project in Papua New Guinea following approval by the PNG LNG joint venture, with first gas targeted in the second quarter of 2028.
The brownfield development will involve the installation of a new 19-kilometre pipeline linking the Santos-operated Agogo Production Facility to the existing PNG LNG gas pipeline system, together with the drilling of two new wells and associated modifications to production facilities.
Santos said the project is expected to deliver incremental production capacity of about 135 million standard cubic feet of gas per day gross, with Santos’ net share estimated at about 54 million standard cubic feet per day.
According to the company, Santos’ share of capital expenditure is estimated at about US$160 million, with gross capital expenditure projected at approximately US$400 million over three years. The project will utilise existing PNG LNG processing and export infrastructure as part of Santos’ strategy to maximise value from established assets and infrastructure in Papua New Guinea.
Santos Chief Executive Officer and Managing Director Kevin Gallagher described the APF Tie-In Project as a “highly value-accretive investment” that aligns with the company’s disciplined capital allocation framework and supports Santos’ long-term production outlook.
“The APF Tie-In Project is a high-quality development with strong economics and a clear role in our strategy to build and grow portfolio production,” Gallagher said.
He said the project is expected to convert Santos’ 66 million barrels of oil equivalent of 2P undeveloped reserves into developed reserves while supporting a production plateau of about 12 years, with potential for production to continue beyond 2050 depending on reservoir performance.
Gallagher added that the project is expected to generate an internal rate of return greater than 50 per cent, with a payback period of less than four years from FID and approximately two years from first gas.
Santos Australia and PNG Chief Operating Officer Brett Darley said key regulatory approvals had been secured, required land access arrangements completed and all material joint venture approvals obtained.
Darley said the company would now focus on progressing detailed engineering design, awarding the two main construction contracts and developing a temporary construction camp ahead of targeted first gas in 2028.
He added that Santos would continue investing in community partnerships and resilience initiatives in the Highlands through the Santos Foundation and broader stakeholder engagement programmes.
Santos holds a 39.9 per cent interest in the PNG LNG joint venture. Other joint venture participants include ExxonMobil PNG Ltd, ENEOS Xplora, Kumul Petroleum and Mineral Resources Development Company.
