Tamboran Resources Corporation and Santos Ltd (OTC:SSLZY) could add up to 6 million tonnes per annum (MTPA) of capacity to the current Darwin LNG (DLNG) facility in Australia's Northern Territory through a second LNG production train.
The companies have signed a non-binding Memorandum of Understanding (MoU) for technical studies regarding the potential expansion, with the DLNG approved for a nominal 10 MTPA.
“The MoU between Tamboran and Santos aims to explore commercialisation options for the development of DLNG Train 2 utilising natural gas supplied from the extensive prospective gas resources within the Beetaloo Basin,” Tamboran managing director and CEO Joel Riddle said.
“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.
"With multiple commercialisation pathways via LNG markets at Darwin and Gladstone and the East Coast domestic gas market, Tamboran is well positioned to assess opportunities to accelerate value for our shareholders.”
Long-standing partnership
Santos operates the existing DLNG project with a 43.4% working interest.
Tamboran and Santos are joint venture partners in the EP 161 acreage in the Beetaloo Basin, where Santos holds a 75% operating interest and Tamboran a 25% interest. The pair have been in partnership for more than a decade.”
The acreage spans approximately 300,000 acres of Mid Velkerri B Shale, with gas resources at depths below 2,700 metres. Previous tests in the region, including two Tanumbirini wells drilled in 2022, indicated Marcellus Basin-type production decline curves.
“We believe the shale within the deepest Beetaloo East region is on par with some of the high-quality shale qualities we have successfully unlocked in the Shenandoah South area in the Beetaloo West," Riddle said.
"The Beetaloo East is the location of the Tanumbirini wells, which were drilled and flow tested in 2022 and were the first wells in the basin to demonstrate Marcellus Basin-style decline curves, albeit with undersized equipment, drilling and stimulation techniques.
“We look forward to advancing discussions with Santos to unlock this significant shale gas resource and contribute to the expansion of DLNG in Darwin.
"This development has the potential to deliver royalties to the Northern Territory Government while generating jobs and royalties for Native Title holders in the region.”
Advancing pre-FEED studies
Tamboran is also advancing pre-FEED studies for the proposed NTLNG project in collaboration with Bechtel Corporation.
Both companies aim to supply natural gas from the Beetaloo Basin to the Australian domestic market and international LNG markets.