Santos shares storm higher on $5.7 billion approval

The Santos Ltd (ASX: STO) share price went up more than 3% following the oil and gas ASX share‘s news about its Barossa project.

Santos has been trying to get approval for its huge new project for a while, but it has faced challenges. It may now have received the victory needed in court.

What happened?

Santos noted that the Federal Court of Australia ruled on the case of Munkara v Santos NA Barossa Pty Ltd (No.3).

This decision was in favour of Santos, as the Court dismissed the application and discharged the injunction that prevented pipelaying activity south of the ‘kilometre 86 (KP86)’ point along the Barossa gas export pipeline.

Based on that ruling, and in accordance with the ‘environment plan’ in force, Santos will continue pipelaying activity for Barossa.

According to reporting by the Australian Financial Review, a group of Tiwi Islanders had said the pipeline and associated concrete would endanger Indigenous cultural heritage sites, damaging “Sea Country, dreaming tracks, songlines and areas of cultural significance including burial sites and animal habitats.”

The AFR reported Santos had presented conflicting evidence that there were no specific underwater places on the proposed pipeline route, according to beliefs of other Tiwi Islanders consulted by the oil and gas giant’s cultural heritage expert witness.

What is the Barossa project?

The Barossa project is an offshore gas project that would mean more gas going into the Darwin liquified natural gas (DLNG) facility in the Northern Territory. It’s approximately 285km north-west of Darwin.

Up to eight subsea wells are planned to be drilled in the Barossa field. The proposal for Barossa suggests water depths of between 130m to 350m for the offshore development.

The approximate liquefied natural gas (LNG) production rate was 3.7 million tonnes per annum, with an approximate condensate product rate of 1.5 million barrels per year. It could have an operating life of approximately 25 years. The initial first gas was targeted at 2023, but that has clearly been delayed.

Santos share price snapshot

Today’s rise has ensured the Santos share price is now in the green, up 2.75% year to date.

The post Santos shares storm higher on $5.7 billion approval appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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