Santos and its joint venture partner Beach Energy have reached a final investment decision (FID) to move forward with the MCO project in the Cooper Basin in South Australia. The project represents a key step in the company’s Moomba Central optimization strategy, aimed at improving efficiency and enabling future production growth. Santos confirmed it will invest $357 million in the development, which is scheduled to be executed over a three-year period. The capital expenditure has already been incorporated into the company’s financial planning and will remain within its $45–50 per barrel all-in free cash flow breakeven target. The Moomba Central optimization initiative is designed to modernize infrastructure and strengthen the long-term operational performance of assets in the Cooper Basin.
A central component of the Moomba Central optimization plan involves replacing seven ageing gas-driven compressor stations with a single electric-driven compressor station. This change is expected to remove bottlenecks in upstream infrastructure and support increased production from the Cooper Basin Central Fields. At the Moomba Gas Plant, the project will also include the installation of new inlet compression equipment as well as additional power generation capacity. These upgrades will allow the facility to receive gas and supply power to upstream satellite operations. By implementing the Moomba Central optimization, the partners intend to streamline operations and ensure the system can accommodate higher levels of output in the future.
The MCO project is supported by strong economic projections. Santos expects the initiative to generate significant efficiency gains over the operational life of the Central Fields. The company is targeting combined capital and operating expenditure savings of more than $600 million (net Santos) by transitioning to modern, more efficient infrastructure. In addition, the project is expected to reduce unit production costs by up to $3 per barrel of oil equivalent. The economic model for the project forecasts an estimated internal rate of return (IRR) of more than 15 per cent. These financial metrics indicate that the Moomba Central optimization project meets or exceeds Santos’ internal investment thresholds.
The Central Fields represent a significant share of the basin’s resources, holding more than half of the remaining 2P reserves in the Cooper Basin and featuring wells with higher productivity. The MCO project is specifically designed to unlock the full productive capacity of these assets. Santos estimates that a full-field development of the Central Fields enabled by the project could deliver an IRR greater than 25 per cent. Santos Managing Director and Chief Executive Officer Kevin Gallagher stated that the MCO project aligns with the company’s strategy of pursuing disciplined growth around its existing infrastructure base.
