Tamboran Resources Corporation (ASX: TBN) and Santos Limited (ASX: STO) have entered into a non-binding MOU to explore the potential expansion of the Darwin LNG (DLNG) facility and collaborate on their jointly owned EP 161 acreage in the Beetaloo Basin.

The MOU outlines plans for technical studies to evaluate options for supplying natural gas to a potential DLNG Train 2 expansion at Middle Arm.

The existing DLNG facility, operated by Santos with a 43.4 per cent working interest, is currently approved for a nominal capacity of 10 million tonnes per annum (MTPA).

The proposed expansion could add up to 6 MTPA of additional capacity.

Joel Riddle, Managing Director and CEO of Tamboran Resources, emphasised the significance of this agreement, stating: “With approximately two million net prospective acres across the Beetaloo Basin, Tamboran holds significant gas resources capable of supplying Northern Territory and Australia’s East Coast gas market for decades.”

The collaboration extends to the EP 161 acreage, where Santos holds a 75 per cent operated interest and Tamboran a 25 per cent stake.

This area encompasses approximately 300,000 acres of Mid Velkerri B Shale at depths below 2,697 metres (8,850 feet).

Notably, two Tanumbirini wells drilled and flow tested in 2022 demonstrated promising Marcellus Basin-type decline curves.

Riddle expressed optimism about the potential of the Beetaloo East region, comparing its shale quality to successful developments in the Shenandoah South area of Beetaloo West.

He also highlighted the project’s potential economic benefits, including royalties for the Northern Territory government and job creation for Native Title Holders in the region.

While pursuing this opportunity with Santos, Tamboran remains committed to advancing its proposed NTLNG project at Middle Arm, which is currently undergoing pre-FEED studies with Bechtel Corporation.

This MOU represents a significant step towards unlocking the vast natural gas resources of the Beetaloo Basin, with both companies aiming to supply the Australian domestic gas market and international LNG markets.