Darwin, 17 September (Argus) -- The partners in the Bayu-Undan joint venture (BUJV) gas project have agreed to transfer a 16pc stake to East Timorese state-owned firm Timor Gap.

A sale and purchase deed has been signed, with Timor Gap to participate in BUJV for the remainder of the project's lifespan, with the production-sharing contract for Bayu-Undan running to 30 June 2026 or until extraction ends, said operator Australian independent Santos.

The deal follows an initial agreement in 2023 with Timor Gap on the proposed Bayu-Undan carbon capture and storage project, which Santos chief executive Kevin Gallagher recently described as the "next big project we really want to focus on".

BUJV includes the near-depleted gas field located 500km northwest of Australia in East Timorese waters, which formerly produced feedstock for the 3.7mn t/yr Darwin LNG terminal operated by Santos. Darwin LNG is preparing to receive next year the first gas from Santos' Barossa project, while Bayu-Undan continues to produce natural gas liquids and for the Australian domestic market.

Santos will hold a 36.5pc interest in BUJV following the transfer, Japanese upstream firm Inpex 9.6pc, Tokyo Timor Sea Resources, owned by Japanese utility groups Jera and Tokyo Gas 7.7pc, Italian energy firm Eni 9.2pc and South Korean upstream firm SK E&S 21pc.

Timor Gap is the majority shareholder in the Greater Sunrise LNG project, presently in the concept select phase. The Australian government is pressing for more action after years of stalled progress with concerns China could instead develop the field in partnership with East Timor. Greater Sunrise partners Timor Gap with 56.56pc, Australian independent Woodside with 33.44pc and Japanese utility Osaka Gas with 10pc.