Why did the stock of Santos Ltd outperform today

On Monday, STO's share price performed better than most. Although the energy producer's shares closed the day 0.75% lower at $7.85, this compares well to the ASX 200 index's S&P/ASX 200 (^AXJO) 1.95% fall.
 
HUNG HOM, Hong Kong - Sept. 19, 2022 - PRLog -- Because of a favourable statement on the Barossa joint venture, the STO share price spared the worst of the sell off today.

The Darwin Pipeline Duplication Project, located offshore the Northern Territory, has received a final investment decision (FID), according to the statement.

The Barossa Gas Export Pipeline will be extended to the Santos-operated Darwin LNG (DLNG) plant, and the existing Bayu-Undan to Darwin pipeline will be repurposed to support carbon capture and storage (CCS) alternatives.

The gas from the Barossa field, situated 300 kilometres north of Darwin, is meant to replace the present supply from the Bayu-Undan plant in Timor-Leste, according to the announcement. The initial gas production at DLNG will take place in the first half of 2025 utilizing Barossa gas.

Kevin Gallagher, STO's managing director and CEO, spoke highly of the initiative. He stated:

By approving the Darwin Pipeline Duplication Project, the Barossa project will be CCS ready. The Bayu-Undan CCS project has the capability to capture and hold up to 10 million tonnes of greenhouse gases per year, which is equivalent to about 1.5% of Australia's annual carbon emissions from other projects, customers and difficult-to-abate industries and it has the potential to be the world's largest CCS project.

This will, however, come at a cost. The addition of the Darwin Pipeline Duplication project is expected to raise STO's share of capital expenditure for the Barossa project by roughly $311 million.

Work on the Darwin Pipeline Duplication project is set to begin in 2023, subject to Commonwealth and other regulatory approvals.

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