Santos has taken a final investment decision on the Moomba Central Optimisation project in the Cooper Basin to modernize infrastructure, reduce costs, and unlock future production growth.

Alongside its joint venture partner, Beach Energy, Santos has sanctioned the Moomba Central Optimisation (MCO) project in South Australia’s Cooper Basin, committing to a three-year development designed to debottleneck key upstream infrastructure and enable further gas production from the basin’s Central Fields. Santos will invest $357 million in the project, which it says is fully budgeted and consistent with its all-in free cash flow breakeven target of $45–50 per barrel.

The MCO project will replace seven ageing gas-driven compressor stations with a single electric-driven compressor hub and install additional inlet compression and power generation capacity at the Moomba Gas Plant. By modernizing infrastructure and streamlining operations, the company aims to improve reliability while enabling higher throughput from the basin’s most productive fields.

Santos expects the upgrade to deliver more than $600 million in combined capital and operating cost savings over the life of the Central Fields on a net basis. The company is also targeting a reduction in unit production costs of up to $3 per barrel of oil equivalent. According to Santos, the project carries an internal rate of return above 15% with a payback period of about six years.

Beyond immediate cost savings, the project is designed to unlock the full development potential of the Cooper Basin’s Central Fields, which account for more than half of the basin’s remaining proven and probable reserves. Santos estimates that the broader field development enabled by the infrastructure upgrade could generate returns exceeding 25%.

The Cooper Basin has been a cornerstone of Australia’s gas industry for more than six decades, supplying both South Australian and eastern Australian markets. In recent years, producers have focused on extending the basin’s productive life through infrastructure upgrades and more efficient field development as the region continues to play a role in domestic energy security.

Santos said the project will also support emissions reduction efforts. The shift from gas-driven to electric compression is expected to cut Scope 1 emissions by roughly 40,000 tonnes of carbon dioxide equivalent annually.

The investment comes alongside the company’s recent agreement with the South Australian government to supply 20 petajoules of gas per year from 2030 to 2040 for the state’s Strategic Gas Reserve. Subject to a final gas supply agreement, Santos intends to use prepayment funds from that arrangement to help finance the Moomba optimization project, further strengthening the economics.

Story Continues

For Santos, the MCO development reflects a broader strategy of extracting greater value from existing infrastructure while supporting long-term gas supply to Australia’s domestic market.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

Oil Prices Surge Past $100 as Iran Names New Supreme Leader U.S. Gasoline Surges to Highest Under Trump as Iran War Roils Oil Market Europe’s Gas Price Set for Largest Weekly Gain in Three Years

Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.

You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.

View Comments