Santos has made 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.
The APF project involves the construction of a new 19-kilometre pipeline designed to link the Santos-operated Agogo facility directly to the existing PNG LNG gas pipeline. The project scope also includes the drilling of two new wells and significant modifications to existing production facilities.
With a total gross capital expenditure of approximately AU$400 million over three years, of which Santos will contribute roughly AU$160 million, the project boasts an impressive internal rate of return (IRR) exceeding 50 per cent.
Santos’ CEO Kevin Gallagher said the project is a highly value-accretive investment that meets Santos’ disciplined capital allocation criteria and supports the company’s long-term production profile.
“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.
“With an expected IRR of greater than 50 per cent and a payback period less than four years from FID, and approximately two years from first gas, the project is expected to be strongly value accretive, support our long-term production profile and sustain feed gas supply to PNG LNG.”
First gas is currently targeted for the second quarter of 2028. Once operational, the project is expected to deliver incremental net production of approximately 54 million standard cubic feet per day (mmscf/d) for Santos.
The tie-in will support a 12-year production plateau, with the potential for the site to remain active beyond 2050.
Santos’ Australia and PNG COO Brett Darley confirmed that land access and key regulatory approvals are already in place. The company is now pivoting toward detailed design work and awarding major construction contracts.
“Our focus is now on progressing detailed design for the facility modification, awarding the two main construction contracts and progressing the temporary construction camp to drive towards first gas in the second quarter of 2028,” Darley said.
Santos holds a 39.9 per cent stake in the PNG LNG joint venture, alongside partners ExxonMobil, ENEOS Xplora, Kumul Petroleum, and the Mineral Resources Development Company.
