Santos Approves Cooper Basin Optimization Project to Cut Costs

Core Insights - Santos has made a final investment decision on the Moomba Central Optimisation project to modernize infrastructure, reduce costs, and enhance future production growth [1] Investment and Financials - Santos, in partnership with Beach Energy, has sanctioned the Moomba Central Optimisation project with a total investment of $357 million, fully budgeted and aligned with a free cash flow breakeven target of $45–50 per barrel [2] - The project is expected to deliver over $600 million in combined capital and operating cost savings over the life of the Central Fields, with a targeted reduction in unit production costs of up to $3 per barrel of oil equivalent [4] - The project carries an internal rate of return above 15% and a payback period of approximately six years [4] Infrastructure and Operational Improvements - The MCO project will replace seven aging gas-driven compressor stations with a single electric-driven compressor hub, enhancing reliability and throughput from the basin's most productive fields [3] - The upgrade aims to unlock the full development potential of the Cooper Basin's Central Fields, which hold more than half of the basin's remaining proven and probable reserves, potentially generating returns exceeding 25% [5] Environmental Impact - The transition from gas-driven to electric compression is projected to reduce Scope 1 emissions by approximately 40,000 tonnes of carbon dioxide equivalent annually [7] Strategic Agreements - The investment coincides with an agreement with the South Australian government to supply 20 petajoules of gas per year from 2030 to 2040 for the state's Strategic Gas Reserve, with prepayment funds from this arrangement intended to finance the Moomba optimization project [8] Industry Context - The Cooper Basin has been a key component of Australia's gas industry for over six decades, focusing on extending its productive life through infrastructure upgrades and efficient field development to support domestic energy security [6]