Santos (ASX:STO) has missed its end-of-year target to ship the first liquefied natural gas cargo from its $6.1 billion Barossa Gas Project in the Timor Sea, raising early concerns over the company's 2026 production outlook.
Initially approved for construction in March 2021, Barossa was scheduled to begin supplying gas to the Darwin LNG export plant by June 30, with the first cargo due in the December quarter.
After prolonged legal challenges, the start-up was delayed to late September, and while Santos confirmed in September that gas had begun flowing offshore, shipping data indicates no LNG tanker is currently in Darwin ready to load.
A company spokeswoman said repairs to offshore piping systems have caused production interruptions but stressed the careful approach aims to achieve higher reliability once full production is reached.
The delay comes amid heightened pressure on Santos' leadership, led by CEO Kevin Gallagher, to lift shareholder returns following the collapse of a $36.4 billion Abu Dhabi-led takeover bid in September.
The company is counting on Barossa and its Pikka oil project in Alaska to boost output by about 30% by 2027, with Pikka first oil expected in Q1 2026.
Santos downgraded its 2025 production guidance in October, citing shipping delays and software issues at Barossa, while ongoing flaring at Darwin LNG signals continuing start-up challenges.