The Santos Ltd (ASX: STO) share price fared better than most on Monday.
Although the energy producer's shares ended the day 0.75% lower at $7.85, this compares favourably to a 1.95% decline by the ASX 200 index.
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Why did the Santos share price outperform?
The Santos share price avoided the worst of the selloff today thanks to the release of a positive announcement relating to the Barossa joint venture.
According to the release, a final investment decision (FID) has been taken to proceed with the Darwin Pipeline Duplication Project, located offshore the Northern Territory.
This will extend the Barossa Gas Export Pipeline to the Santos-operated Darwin LNG (DLNG) facility and allow for the repurposing of the existing Bayu-Undan to Darwin pipeline to facilitate carbon capture and storage (CCS) options.
The release highlights that gas from the Barossa field, located 300 kilometres north of Darwin, is intended to replace the current supply from the Bayu-Undan facility located in Timor-Leste. The first gas production at DLNG using Barossa gas is targeted for the first half of 2025.
Santos' managing director and CEO, Kevin Gallagher, spoke very positively about the project. He said:
Taking FID on the Darwin Pipeline Duplication Project will allow for the Barossa project to be CCS ready. The Bayu-Undan CCS project has the potential to capture and store up to 10 million tonnes of carbon dioxide per annum, equivalent to about 1.5 per cent of Australia's carbon emissions each year from other projects, customers and other hard to abate industries and has the potential to be the largest CCS project in the world.
This will come at a cost, though. Adding the Darwin Pipeline Duplication project is estimated to increase Santos' share of capital expenditure for the Barossa project by approximately US$311 million.
Work is scheduled to commence on the Darwin Pipeline Duplication project in 2023, subject to Commonwealth and other regulatory approvals.
