Santos (ASX:STO) and its joint venture partner Beach Energy (ASX:BPT) have reached a final investment decision to proceed with the Moomba Central Optimisation Project in South Australia’s Cooper Basin.
The $357 million initiative marks a shift toward modernising the region's upstream infrastructure, with delivery expected over the next three years.
The project is designed to "debottleneck" existing systems by replacing seven ageing gas-driven compressor stations with a single, high-efficiency electric-driven station.
The overhaul is set to unlock the full development of the Central Fields area, a low-cost and high-productivity hub.
Beyond operational efficiency, the MCO Project is a cornerstone of Santos’ decarbonisation efforts, targeting a scope 1 emissions reduction of approximately 40 kilotonnes of CO2e per year.
The MCO Project boasts robust economics that exceed Santos’ internal hurdle rates.
It targets over $600 million in combined capital and operational savings over the life of the field, while aiming to reduce unit production costs by up to $3 per barrel of oil equivalent.
With an estimated internal rate of return exceeding 15% and a projected six-year payback period, the investment remains well within the company’s $45–$50 per barrel free cash flow breakeven target.
Santos intends to utilise prepayment funds from its recent strategic gas reserve deal with the South Australian government.