Asset A&D

SK Group Acquires a 25% Interest in Darwin LNG and the Bayu-Undan Gas Field

By Shriya Bhargava
March 18, 2020
a minute read
Offshore Rig

SK E&S Company Ltd., a subsidiary of South Korean conglomerate SK Group, has entered into an agreement with Australian independent oil & gas producer Santos Ltd. to acquire a 25% interest in the Bayu-Undan gas field and Darwin LNG Project in Australia, for a total cash consideration of US$390 million. The deal follows Santos’ agreement with ConocoPhillip to acquire its entire northern Australian and Timor-Leste business, including operated interests in Darwin LNG and the Bayu-Undan, Barossa and Poseidon fields for a total consideration of US$1.39 billion.

SK E&S currently holds a 37.5% interest in the Barossa project to backfill Darwin LNG. Santos’ sale of interests in Darwin LNG and Bayu-Undan to SK E&S advances partner alignment for the development of Barossa, which remains a key priority for both companies.

The Bayu-Undan field is located approximately 500 km off the coast of Darwin in the Timor Sea. Gas produced from the field is transported to the 3.24 million tonne per annum Darwin LNG facility located onshore at Wickham Point south of Darwin City. Following the completion of both transactions, project shareholders will include Santos (43.4‬% and operator), INPEX Corp. (11.4%), Eni SpA (11%), JERA Inc. (a 50:50 joint venture between Japanese power companies TEPCO Fuel & Power Inc. and Chubu Electric Power Company Inc.) (6.1%), Tokyo Gas Co. Ltd. (3.1%), and SK E&S (25%).

The transaction between Santos and SK E&S remains subject to the completion of Santos’ deal with ConocoPhillips. Credit Suisse and JB North & Co. are acting as financial advisers to Santos on the transaction.

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