Well, good morning, everyone. Makes me a bit tall for a short guy like me. Good morning, and welcome to Santos' Annual Investor Day. I draw everybody's attention, well, I would have drawn everybody's attention to the last slide, but it moved, which is the disclaimer slide. Important that you all read that and study it very carefully. There might be some questions on it later on this morning, and if I move on to our Acknowledgement of Country, Santos acknowledges that we're meeting on the traditional land of the Gadigal people of the Eora Nation, and that we pay our respects to Elders past and present, so I'll move on to the agenda slide this morning. We've got a busy morning ahead of us. Obviously, I've just welcomed everybody along this morning.
I'm going to open with a review, an operations update across the portfolio, talk about how the business is performing year to date, and also a bit of a recap on the corporate strategy, the company's strategy, before handing over to Sean Pitt , our Executive Vice President of Marketing and Trading, who's going to take you across the markets and how they're looking and how Santos is positioned to maximize the opportunities out in the marketplace in the years ahead. Of course, how we're performing today across those markets. Then we'll have a morning coffee break before handing over to Sherry. Sherry, thrown in a deep end, I guess. Once you're on salary, Sherry, that's it. You're right in the deep end, right? A few weeks after starting with the company. And she's going to take you through capital management and finance overview.
Of course, this morning we're announcing our new capital allocation framework once Barossa and Pikka are online. And it's something we've talked about for a long time that we're aiming towards. And so Sherry will take you through that and fill you in on the detail of that and what that's going to look like going forward. And then we've got Brett Darley to give you some confidence and comfort that we're not going to have empty LNG plants in a few years' time. We've got plans in place. We're working with our joint venture partners on backfill strategies around that portfolio and just show you just how strong that portfolio is. And some great news there. You probably saw this morning in a release that the Angore wells are on stream. And we'll talk a bit about that today.
That's been a long time coming, but that's a great delivery for this year. A very big development project, over $1 billion, bringing Angore back on and currently producing around 350 million scf per day and backing out production in PNG. We're now having to shut in some of the production that we've been producing all year long. That's a really good development up in PNG. Then Alan's going to cover the energy solutions. Of course, Alan's on a bit of a high. He's got the Moomba CCS Phase 1 project online and working as designed to work. It's delivering what it promised to deliver in terms of the capture and storage.
And he'll talk about his new carbon capture growth targets that we're announcing today as well and what that means in terms of equivalence of Scope 3 emissions targets for Santos. And then we'll have some questions and answer session at the end. We'll take some Q&A. And I've been asked to remind everybody in the room, two questions only, please. There's a lot of people in the room, and we know there'll be a lot of interest. So we are going to limit it to two questions. And so that'll be a very hard rule, apparently, that we're going to enforce around the room. So pick your best two questions. Go with the best first or the hardest first, as they say, and we'll see what we can do to make sure we address your inquiries. All righty. Let's kick right off into the portfolio update.
And if we can, I'll start with the next slide, please. Always like to start with our safety performance, personal safety and process safety. And what's really important to us, I set that out back in 2016 to build a reputation for Santos as a reliable and safe operator. One of the question marks we would have had back then was really we were known for the Cooper Basin. We weren't really known beyond the Cooper Basin. It was building that brand as a safe and reliable operator, given that we were then venturing to new LNG plants like Gladstone. And, of course, our plans even back then, although it wasn't public, was, of course, to be able to leverage off of that foothold and buy the operatorship in Darwin and build a much more significant operating footprint. And so building that brand was really important.
And safety, of course, is a big part of that, process safety and personal safety. And it's been really good to see the improvement in all metrics across our safety performance, and particularly since COVID, because we saw that the entire world slipped back during COVID. Whether that was distraction, whether it was stress, many, many factors, people working away from home for long periods of time, the isolation they had to go into, the quarantine they had to go into on the way to work and the way home from work, all of that had an impact on people's mental health and resilience. And we saw safety performance deteriorate globally. And you can see that our performance has really come back on track, and it's continuing to improve year- on- year.
A big shout-out to a lot of the people across our organization who are really driving high standards there: Steve Trench, Megan Rivers, the guys that are really putting out every day to drive that safety culture across Santos globally. The majority of the incidents you can see that we have now are with contractors. Contractor management is a big focus for us. Ironically, for Santos, one of the biggest risks we have in our portfolio is driving incidents because we drive, I can't remember how many times it is now that our people go around the Earth annually in terms of total kilometers drive, but it's an incredible amount when you think of all our operations across the vast Cooper Basin, Queensland, PNG, and even in Alaska on the North Slope.
A lot of that is on land, and it requires people traveling large distances every day to do their work. That's a big exposure for us. So real focus on motor vehicle safety and to have these safety numbers and the performance trends is really pleasing. A couple of big things we did this year. As always, we have an annual Stand Together for Safety event where we shut down our operations all over the world for an hour or two at the same time or on the same day, anyway, and we focus on safety, and we work with the crews, and we engage with the crews to find out what we can be doing better and, of course, to communicate what our expectations of all of our workforces are. We do that once every year, and we did it in November this year.
We've also rolled out a new safety behavior expectations program. That's a program we've rolled out at every Santos operation anywhere on the planet to drive that standard approach, to continue to drive that improvement in our safety. On process safety, the key metric that we use, the primary metric, if you like, for process safety is loss of containment incidents. The key focus of process safety is keeping stuff in the pipe, keeping it in the system, not having leaks, not having gas leaks or releases. You can see there that that is a continual battle, particularly when you've got aging infrastructure like in the Cooper Basin and in PNG. To say it's vintage would be a bit of an understatement. A lot of the equipment we're working on these assets. Keeping that safe is a huge, huge effort.
Brett will talk a little bit about what that means in terms of cost and where his focus is going forward, which should not only result in very significant cost reductions across the Cooper Basin, but also safety improvements. You can - but it is pleasing to see that continual drive down in process safety releases. In terms of how our business is set up, if I move to the next slide, I thought it was worth starting the overview by just reminding people how we've set the business up or informing you if this is new to you. Effectively, you've got to think of our business as three businesses. We think of our business as three different businesses. We've got our LNG portfolio with some world-class LNG assets in PNG, Gladstone, and Darwin, all in a nice little triangle, very, very close to our markets.
One of the big competitive advantages of this LNG portfolio is our shipping times, our shipping distances to our clients. You've got to think of that in terms of cost of shipping advantage, but also emissions. Every day a carrier goes at sea, it normally loses about 0.1 of 1%, 0.1%, I should say, methane to the atmosphere as boil-off gas. So when you think about 20-odd days coming from the U.S., 23 days, I think it is, from the Middle East, that's our competition. The life, a 20-25-year life of an LNG facility, that is very significant Scope 3 emissions advantage that our LNG portfolio has over the competition. Sean will talk a bit about that later on. Then we've got our integrated oil and gas, our traditional conventional oil and gas businesses.
They're not linked to LNG facilities, and that's both in Alaska and Western Australia, and then, of course, we've got our SES assets, which, if you think of those predominantly as the three CCS hubs that Alan will talk about later on, so I thought it was worth just talking about those, and, of course, we've got to mention the Santos Foundation that does some amazing work in PNG, but also now in Australia. The foundation's spreading its wings, and that's the charitable arm of the company, if you want to think of it that way. There's a lot of really good work on the company's behalf in communities, and one of the great things that the foundation does is it leverages off of the sponsorship and donations that come from Santos to get funding from other entities.
We've got other companies funding projects alongside us in PNG, but also now in Australia coming in and want to participate in the foundation. If I go to the next slide, please. I'm going to run around these pretty quickly. If I think of some of the major highlights around the portfolio in PNG, 79 cargoes delivered to the end of October, on track to deliver just short of 100 cargoes for the year. We completed the sell down of our 2.6% interest in the PNG LNG project to Kumul. I know that was a long time happening, but we got there in the end. Patience is a virtue, as they say. Strong production this year through PNG and on plan, really supported by the Santos-operated assets in PNG.
And I'll talk about that in a minute, the reliability and how we were able to do that, where we were putting in around 250 million standard cubic feet of gas per day from our own operated fields to keep the production at PNG LNG up throughout the year. And that's been up quite significantly on our production, Santos-operated production at the same time last year. And 20%, that equates to 21% of the PNG LNG supply this year coming from Santos-operated gas in PNG. And we couldn't have done that without that strong process safety and that strong operating culture. And I'll show you that in the next slide in a minute. Stay on this slide, please. That wasn't a hint to move to the next slide. And the East Coast LNG business.
We refer to Gladstone as the sort of plant that leads up our East Coast LNG team because we supply gas, of course, from three different supply sources. We've got our GLNG project equity gas, which now makes up 62% of GLNG feedstock. And then, of course, we've got Santos, sounded like an American there, Santos. Santos's equity gas, which now makes up 15% of the gas going into GLNG. And only just over 20% of the gas now is reliant on third-party contracted gas. And you'll remember when GLNG came on stream back in 2015, 2016, 2016 when it came on stream, that was almost 60% third-party reliant on third-party gas, 60% of the feedstock back then. And when you take the Cooper Basin gas plus that 60, it was very small GLNG equity gas. So we've been building that year- on- year.
That's a real success story and a real testament to the work the guys are doing to get those well costs down over the years. We've delivered 80 cargoes year to date in GLNG between Cooper Basin and our CSG operations this year, on track to deliver around 330 wells for the year. Of course, GLNG is shut down. We are still producing some gas in the Northern Territory domestic market from Bayu-Undan. We'll be able to keep squeezing that and getting some gas out. We struck a deal with PWC in the Northern Territory to supply them gas, much-needed gas on commercial terms. GLNG is still. It's expensive gas because the volumes are low, but it's not going through the plant. This is going straight into the market.
As I said, Darwin shut down, but the Darwin Life Extension Project is now 67% complete and due to be on stream ahead of Barossa starting up in Q3 next year. I think that's due to be on stream in the second quarter. And, of course, the Barossa project's now just around 84% complete as at the end of October and progressing well. If I run through the assets in PNG on the operational, the next slide, please. The callout, really, a lot of this I've already covered. I think the callout's on the reliability. Now, this is the reliability of the Santos-operated assets in PNG. And what I'd like to, without bagging the past, that's not the point of this chart. It's not about bagging anybody in the past, but this is what it used to be. This is the reliability.
Think of that 17% of the time it wasn't available, wasn't reliable. It was shutting down for maintenance or whatever, right? Applying our process safety and our maintenance approach across these assets, year to date, we've been driving that at 97%. So 97% of the time we're having these facilities on stream. What that means is a very significant upside production potential over the course of 12 months. That's why we put so much effort into maintenance and so much effort into the reliability of our assets to get that extra production and that extra availability through them. That's allowed us to supply 21% of the feedstock gas at PNG LNG from Santos-operated assets in 2024. That's allowed us to keep the production higher than maybe you would have expected it to be otherwise.
I think other notable highlights. The big news is the Angore project's online and producing at 350 million standard cubic feet per day. That's a TCF prospect we've developed, Exxon operating. And importantly, with that project, I think it's producing at those rates. One of the wells is on a 30% choke. And I think the other one's about 50% or something. So there's a lot of resource here. We won't know if there's an upside outcome here for probably six to nine months. We've got to let it produce for a while because it's such a big, big play that you really need to let it produce for a while to understand if there's any sort of EUR upside or anything like that. In addition to Angore, we're currently drilling the Hides Footwall well. That's another very prospective opportunity.
Brett might talk a little bit about that in his section, so I won't steal his thunder. Angore, I've summarized here. We'll just keep moving, please. If I go to GLNG. On GLNG, as usual, we think of that as an upstream drill complete connect asset. It's about getting as efficient at that factory-style manufacturing process of drilling, completing, and connecting wells as we can. We talk about the number of wells per year. We'll look at how many wells we're drilling each year to keep driving that up. Production and unit cost is really important to us. Of course, we'll look at the drill complete connect performance. You can see the CapEx we're spending every year. We get, how many wells are we getting for that CapEx? That's really important to us to keep that metric alive.
I think in terms of the highlights, some of the technical highlights for this year. Fairview, it started growing production again this year. That was a first. First time that's happened in a long time. Actually seeing that bottom out and come back up. So that was good news. Roma well cost continuing to be driven down. And that's particularly important given that we're drilling deeper wells out in the flanks at Roma now. So I think they're about 35% deeper. And we're doing that extra depth in about a day. So it's taken about an extra day to drill some of those deeper wells. But the efficiency and the unit cost per well is right on track. We want that to be continuing to perform over time. Our CSG production's continued to climb. And that's why we're now at the rates we are.
You saw in that first slide in terms of percentage of the feedstock. We're continuing to build that supply from our indigenous production. What's really important to recognize about the CSG wells is that the tails are very strong. It's Hard yakka. These are Hard yakka assets. You can't take your foot off the pedal for five minutes. You've got to keep getting better at drilling. You've got to keep drilling hundreds of wells every year. You've got to keep on top of your costs. It's just an efficiency game. It's about being efficient and reliable and consistent. But what is also important to recognize is once you do that hard work, I think later this decade we're set to drill up most of our feedstock. It's to recognize how strong the tails are on these wells. Very strong tails.
And even though we stop drilling, I don't know, predominantly around the 2030 mark or whatever it is, you will see as far out as 2045, even with natural decline and doing nothing else, you're still filling one train. Still filling one train in 2045. So it's really strong tails from CSG. Just like the U.S. shale. You've got to keep drilling and replacing decline to stay at your capacity or to flatline your performance or to grow it. But once you stop, the tails are very strong for a very long time. And it becomes more of a workover type focused operation now. If we go to the Cooper Basin. Cooper Basin, another Hard yakka asset, right? It never gets easier year- on- year in the Cooper. But some great stuff. Over the last few years, we've been spending a lot of effort and appraising new opportunities.
We want to redefine the Cooper Basin. We want to reshape the Cooper Basin because it's just too hard to keep doing what we've been doing forever. And so there's been a lot of work on some electrification, some optimization, digitization. There's many wells now that we can operate from the control centers in Brisbane, like the CSG wells in Queensland. So we're taking people out of the field and we can start wells up and shut them down remotely. And, of course, the Cooper Basin was never like that. It's a very, very old asset from sort of 60 years ago, right? So a lot of the equipment was from 60 years ago. Still is from 60 years ago.
In fact, when we used to do our cybersecurity assessments, the Cooper Basin was always the safest asset we had across the portfolio because it was so old that cybersecurity wasn't an issue for it. It wasn't connected to anything. That's changing as we modernize and we improve the technologies out in the Cooper Basin. What's interesting with the Cooper is you've got to recognize the Cooper Basin; 90% of the gas goes to GLNG. It's a GLNG asset. It's an LNG asset for us. Has been now since 2016. And only 10% of that gas goes into the domestic market. We're on track to drill over 100 wells. I think we're at 105-106 wells for the year. We've now bottomed out that decline you saw during COVID when the drill rates dropped. So we've bottomed that out and it's now just starting to nudge up again.
And so if we can keep the well rate up over the next few years, we should start to see production building back up. The Cooper Basin is simply the name of the game there: how many wells you're drilling each year. How many wells are you drilling each year? And Brett will talk about how that converts resource to reserves and all that sort of stuff over the years. But the story is the same year- on- year. Volume works, unit costs go up when the production goes down. When the production goes up, unit costs go down. So it's actually about maintaining production. And we've learned that lesson many times over 60 years. And so hopefully we're not going to keep re-learning that message. And Brett's got a great story to tell about what we're doing there.
Ongoing success in our horizontal wells in the Granite Wash, some big wells there. In fact, one came on at just around nine million scf per day earlier this year or late last year, and I think it's still producing over 2.1, 2.5, something like that, million scf per day today, so we're getting a really good feel for those type curves. The fracking technologies we've been trialing out there, Brett will talk about that today and what that's unlocking for us, but also the work we've been doing with some of our major providers to develop drilling tools that can drill in rock temperatures up to 200 degrees Celsius. So we've got areas of our field now we couldn't drill only a few years ago. The technology didn't exist to do that, and we've been testing technology over the last three years or so.
Now we're able to land, drill and land these horizontal wells in these areas that were written off effectively in the past because we just couldn't access them. That's unlocking significant new resource. We've had very good successful wells there. And that's now unlocking these resources. And Brett will talk about his development plans there. And the good news, I don't want to steal too much of Brett's thunder, but you can just re-emphasize it, perhaps, Brett. But the good news about a lot of the stuff in the Cooper that Brett's focused on, the high value stuff, it's central. It's in the center. It's near Moomba. And that's really important from an infrastructure and a cost perspective. If I move on to the next one, in terms of give some project updates. Obviously, on the LNG projects, we've got the Barossa project.
You're probably, this is the one that we report the most on, of course. And if I think back to a year ago, the project had stalled. We had some activity that was holding us up. Thankfully, we got through that. We've moved forward. That's all I'm going to say on that issue today. And we are progressing the project. 84% complete. And we are 50% partner in that. Very significant resource and reserves position on that project. The reservoir results have been very encouraging from the three wells that we've now drilled through the reservoir. We've gone back to the one. You'll remember there was one well we'd suspended above reservoir for logistics and SIMOPS purposes. We've now gone back and drilled through that reservoir. And the reservoir results there are slightly better than expected as well. So we're getting really positive, consistent results across this field.
I've always said good projects get better with time. Good fields get better. I think we're beginning to see a bit of that coming through in Barossa. The FPSO facility is progressing well. I think some of you have probably visited that over the course of the last year or so. I think we've got some people going out in the next week or so as well to visit it. You're going to see a very large FPSO. I think it's the biggest FPSO in the world outside of the floating LNG facility that Shell has at Crux. It's a massive facility. We've got a green processing plant. Now, before you get too excited about what that means, it's painted green. It's just very green. It doesn't mean anything. I don't want to get sued for using the term green processing facility. It's just painted green.
Because BW, our operator, their colors are green. Santos is blue, they're green. It's a bit like Celtic and Rangers back in Scotland. Although hopefully a better rivalry, not a rivalry, a partnership, a partnership I should say with BW for many years to come, so the wells are progressing well. The drilling out there is tough. We've had some drilling problems in the intermediate section. We knew that. It's the biggest drilling risk that we had, and it's a cost and time issue as opposed to a well productivity issue, but we've had a few stumbles getting through those, but we're getting across it. We're getting through it. I've got three wells now landed, drilled at bottom reservoir. One is half drilled. By the end of this year, we'll have. The target is to have four.
Or certainly in Q1, we should finish completing and testing the first four wells. This project could probably run to capacity on three wells. We've always said four, but because of the well test, the well test performance being a bit better than expected with projected rates and some of the wells are over 300 million standard cubic feet per day at full rate. These are big bore gas wells. And you could probably run this facility on three wells. The plan is to drill six. And then hopefully that gives us a contingency built into the system all the way to the end of this project. If I go to the project, the integrated oil and gas portfolio, and we look at that. And basically, as I said earlier on, that's Western Australia and Alaska. Pikka, of course, is a project. It's a development project.
It's not a producing asset yet. It's coming closer, but it's not producing yet. The good news on Pikka, I'll go more over the project in a minute. But I think really the thing that excites me most about Pikka is the quality of the product. The Alaskan North Slope crude oil currently gets a premium to Brent of anywhere between $2 and $3 on any given day. So that's always good news whether Brent's high or low, right? It's always good to get a premium rather than a discount to the benchmark. So it's a good project. The drilling performance recently has really started to pick up. Ironically, since we gave the cost guidance a couple of months ago, the drilling performance is now showing a saving of around 10 days per well. And so half that's about $5 million a well.
We're actually starting to see that drilling curve we talked about earlier in the year coming through, that learning curve coming through as we're landing these wells more consistently and showing that good learning performance. It's good that the Alaska Department of Natural Resources approved our application to expand the Pikka Unit. So that protects us in terms of the future resource development opportunities. Very, very significant resource position we have on the North Slope. And if you were looking in isolation at where is the sort of game-changing growth opportunity in the future for Santos, Alaska would have to be in the mix for that in terms of that consideration. However, what I will say is that what we've said to the Alaska team is, let's not think about phase II. Let's not think about any expansion or growth in Alaska. Let's deliver Pikka phase I.
The focus is myopically on delivering phase one. And if I go to that project, we'll jump back to the WA slide in a second. If I can go to the Pikka slide, please, yeah. You can see here, I've covered a lot of that. We've got 10 wells flowed. So the biggest risk to this project was always reservoir. Always the reservoir. We've significantly de-risked that now with the well results coming in line with expectations. And as we've drilled more to the south, I'm going to impress Rebecca here. As we drill more to the south, the reservoir quality is improving. We're seeing better reservoir. That's exactly what we predicted would happen. So that's good news. And all of these wells are drilled from one drill site. And we're still maintaining first oil forecast of mid-2026. So the project's almost 70% complete.
It's actually ahead on time on the curve and going well. You can see some of the highlights here, and if I can jump back to the last slide, because often forgotten about, we've no major projects that we talk about in Western Australia, but Western Australia has had a lot of activity going on over the last year, and good news is that we successfully drilled the Halyard infill well recently, and we got an upside outcome there with the EUR expected to be around 20% higher than our P50 expectation pre-drill, so that was a very good result and significantly under cost at this stage of that project. Now, that'll be tied back in Q1 2025 and online in Q2, and so we're really happy with that as an outcome.
And particularly the excellent execution by the WA team to come in sort of 15%-20% under budget on that project to date is an excellent outcome in this inflationary environment. A lot of M&T activity in the west. And the guys, Sean and team, have done a fantastic job there realizing higher gas prices, being able to use our transport positions, and the fact that we've got gas from different assets we can move about that system. So we've been able to help other people who have supply issues and make some extra revenue there. So great job by Sean and the team over there. Continued to squeeze more out of Devil Creek and Reindeer. We're cycling those wells. So I don't know if you recall, we said that that field would be finished last year, end of field life last year.
And what we've been able to do with the reservoir there is shut it in, let pressures build up, cycle it for a couple of months, shut it in again when it dies, and keep doing that to squeeze more gas out of that asset. And that's been a real good optimization by the team. Again, relatively high cost production because it's not producing every day of the year, but we're getting more out of it and it is commercial. And in terms of Ningaloo Vision, currently shut down doing some repair work, maintenance work on the facility right now, but a good strong production year to date on the Ningaloo Vision. And that comes to end of field life planned for early 2025, but we're in discussions to try and extend that a few months, an extra four or five months or so.
That's why we're doing these repairs right now to try and support that application. We decommissioned the Campbell platform, and 90% of the materials there were recycled. That was a great effort by everybody, again, right on budget. Of course, our decommissioning works not only for offshore platforms. We've decommissioned a number of offshore wells in Western Australia this year. As much as you might look at those as hollow barrels or hollow dollars that we're spending, it's a liability we're clearing up. We're clearing it. We're getting it off and we're doing it efficiently with 13 wells around Varanus Island and four so far around the Mutineer, Exeter, Fletcher, and Finucane fields. We'll finish that campaign, I think, by the middle of next year when we'll have done all of the wells on the MEFF project. If I can go forward, please, a couple of slides.
Moomba phase I online and storing CO2. Of course, this is exactly what we said we're going to do. They've got a quote from me in October 2021 saying that this is what we do. We rolled this strategy out in 2020. We rolled our net zero targets and our strategy and our vision out in 2020. We said it would be online in 2024, and it's online in 2024, and it qualifies for ACCUs. It qualifies for ACCUs. That's exactly what we said we were going to do. What I'm really proud of, all of the team, and some of them aren't even at Santos anymore. Some people have moved on. They got poached. They're going to work on CCS projects elsewhere.
I just want to acknowledge all of their efforts in making this happen because there was a lot of people trying to stop this project, not wanting it to happen. A lot of obstacles thrown in the way, but it's online, and you can see it's capturing all available CO2. It's injecting it. And we have spare well capacity. That green line tells you what the capacity is. The capacity we have in our wells, injectivity capacity, is above that of the facilities. So we're limited with our facilities to around 1.7 million tons if we have 1.7 million tons. And the good news is, as of just the other day, we've now stored already 150,000 tons year to date since it came online, even though some of that has been during that commissioning phase where you can see we've been shutting in, testing things and stuff like that.
150,000 tons. Now, 1.7 million tons per annum. To put that in context, that's the equivalent of taking something like 230,000 cars off the roads in South Australia every year. Every year you're doing that. So a very significant contribution to emissions reduction in the state. The entire emissions of South Australia is 15.8 million tons per annum. 15.8 million tons. We're taking care of 1.7 of those here at Moomba with this project, this phase I project. So really significant. You've got a. I know there were some questions, I think, about the break-even cost for this. It's $28. So when we say approximately 30, it's $28 break-even lifecycle for this. That's the cost of carbon we need for an NPV 10 . That's the way to think of that, right?
We're very confident that this is one of, if not the lowest cost carbon capture and storage project in the world. You can see how it compares with a lot of the benchmarks here. Very importantly, why we put so much effort into this, this project's the catalyst to build the belief and the momentum around the other aspects of our energy solutions business. It's been really important that we push through the criticism, the obstacles, the resistance to get this project online to show that it's worked. We've been injecting gas in the Cooper Basin for 50 years. It used to be part of our business model, right? We used to store it in the summer, produce it in the winter, right?
Inject it in the summertime, build up our storage to 70 petajoules or so at the Moomba storage facilities, underground storage, and then produce it in the high-demand winter seasons. So we know the reservoirs. And likewise, an even better reservoir for storage is the Bayu-Undan one, which I'm sure Alan will talk about later. So then if I go to talk about net zero and net zero targets, delighted to announce our new carbon storage target for Alan's carbon management services business, which is to build and operate a commercial carbon storage business that will safely and permanently store around 14 million tons per annum. And that's a very significant number. So we're going to build CCS projects taking third-party CO2, third-party CO2, and store it. And we want that to be around 14 million tons per annum. That's the target we're setting by 2040.
Why that's a significant number is because that's equivalent to around 50% of our Scope 3 emissions in 2023, our downstream Scope 3 emissions that come from the use of our products. So it's a very significant number. The longer-term target, the aspiration, more than a target. It's an aspiration, is to store more carbon than we emit across our Scope 1, 2, and 3 emissions. That's a longer-term aspiration for Alan's business. To build that business, a commercial, profitable business that makes money out of storing other people's CO2. You can see we've got our other targets that were previously published. Nothing's changed there. Now, very interestingly, when we talk about our 2030 emissions intensity targets, that's against our 2020 baseline levels.
What I can tell you is that the minute we switched on the Moomba CCS project, we reduced our current emissions intensity for the company around 25% on the day. It came down around 25% on the day, and if I take it back to my 2016 level, now I'm confusing everybody with different hopping around the benchmarks. It's about a 33% reduction just by turning on phase I at Moomba, so it has a very significant impact on the emissions and emissions intensity of our company, so that's net zero. If I move forward, in terms of building our business and building our future, you can't do that without investing in communities, and I thought it was worth sharing with our investors some of the good progress we made. One of the things we focus on is local employees. That's a cost advantage to us.
Moving away from high-cost, five-four, ex-pat workforces and having locals trained up and competent and bringing them into our organization, train them on different assets and put them back to their home countries so they can run those assets locally. We have some assets that have got, when we inherited them, had very significant ex-pat workforces, which are very expensive. They're very expensive. They're not cheap. And you can see the high levels here of local workforces. And even in Australia, we're looking at local communities and saying, "How high can we drive the local workforce levels there instead of fly in and fly out?" Because it's all costs. Now, you might be a Qantas shareholder. You might get nervous about me saying that, or Virgin or whoever else. I don't want to pick on Qantas. They've had a tough year. That is, right? That's not my aim here.
But the point is we're not here to support airlines and support all those other opportunities. We're here to get the lowest unit cost we can across our assets, and a local workforce makes sense. You can see even in PNG, we've got a local workforce, a local content level that's higher than Oil Search ever achieved in their history. We've done that in four years or three years. In three years, we're now at something like 92% local content in PNG. We've got the first senior operations leader being a national in PNG. And so we're really proud of that. Female representation. That's one of our diversity metrics. Now, we don't have public targets like a lot of companies do, but we believe in diversity. We believe in the value of diversity. And you can see that only shows you the progress from 2021.
That 40% was in the mid-20s in 2016. That 41%, the office. And that was 6% back in 2016. 6%, the field representation. So getting a lot more females working in the field, breaking those old cultures and more modern, young, enthusiastic, ambitious folks working in the field. And we've seen great progress in cultural improvements as a consequence. You can see the number of cultural heritage assessments we do across our onshore operations. Really significant. People walking, walking the land and looking for cultural heritage and artifacts, etc., ahead of drilling rigs going in to drill wells and making sure that we get the clearances. We have. I can't remember how many. It's close to 100. It'd be 70, 80, 90 people that are cultural heritage officers, traditional owner officers who go out on the land and inspect the land and give us the clearance to go drilling our wells.
A lot of effort in that space. Indigenous employment. We've really ramped up the amount of Indigenous employees we have across the organization over the last four or five years. You can see that building up. And of course, Indigenous spend, what does that mean? That's not spending it on Indigenous people. That's not what that is. So if you don't go dividing that number by the number of employees you work out from out of the chart and think they're on mega salaries, that's using Indigenous-owned or partially owned contractors and building that capability in those, again, local communities. It's a good long-term benefit, building that capability local to our assets. And of course, you get the cost advantage of not having to mobilize international contractors to do work where you can build local content. If I keep moving forward, I think we're going to switch gears now.
So that was a bit of kind of intro into the sort of longer-term strategy stuff. I thought what was interesting is to just stop and say, "What are we building at Santos?" Strategy is not a six-month game. You don't change your strategy every two or three months. And I thought it was worth reminding people. We set off on a journey back in 2016. And the first objective of the transform part was to get an operating business that produced cash, free cash flow from operations. That was step one. We weren't doing that back at that time. And we had to have a business that could do that right through the cycle, right? You should be able to generate free cash flow. Now, you would talk about the quality of the portfolio or whatever. It doesn't really matter.
You've got to have a business that is focused on generating free cash flow from its operation. That was the transform phase. And then, of course, we went to build the portfolio. And that was the acquisition phase. We did the Quadrant Energy deal in Western Australia, a really important acquisition for Santos. And it really played its part in 2020 when the world crashed again, where we had all these fixed-price CPI gas contracts, high volumes at the time that gave this wonderful hedge in the portfolio. And so you might look at that as an NPV thing and say, "Well, that didn't deliver any more or less value because of that," but it protected the company through that phase. And that was a really valuable part of the diversity mix in our portfolio. And that was a very deliberate strategy.
It gave us some of the resource development opportunities in the west. Then we did the Conoco acquisition of the northern assets. And sometimes it's better to be lucky than good, right? And of course, the very high commodity prices in 2022 and the fact that every single cargo from that facility was spot in 2022 worked to our advantage and made that a great acquisition. And then, of course, we had the merger with Oil Search at the end of 2021. And if you try and think of Santos today without that, what would it look like? It'd look very, very different and a much weaker company. So that was how we were building and growing. And of course, we're in that growth phase now, which is capital intensive. We don't hide from that. It is what it is.
We knew when we went into that it was going to be a tough two or three years to deliver on it. We're coming to the end of that phase now. So what next, and our backfill, sustain, our decarbonized, low-carbon fuel strategy is designed to build a more sustainable business. We've been on a journey for nine years trying to build a company that can provide sustainable cash flows, and we can move. We can move from an organization that is focused on operating free cash flow to one that can think about true free cash flow after its investment, after the backfill strategies and all the rest of it, having cash left to return to our owners, to our shareholders. That's what we've been trying to build. You can't do that overnight.
We'd all love to just press a button and it just pops up and you get these wonderful assets, but we've been on a journey. It's steadily improving the company year- over- year, and we'll show you how that's going. It's not all been smooth sailing. We've had to deal with a one-in-100-year earthquake in PNG. You thought I was going to say pandemic. A one-in-100-year earthquake in PNG in 2018 that took our key asset offline for a number of months. We've had to deal with two very severe oil price crashes during that period, and of course, a one-in-100-year pandemic. A couple of takeover attempts that, while they never played out to fruition, take a lot of attention and distraction inside organizations to manage your way through that.
And yet we've continued to stay myopically focused on our strategy to get to the desired end game, which is coming. And that's what we call our sustainable returns phase, which is about building a business that can still going to have to reinvest. Still going to have to reinvest capital. You can't stop investing or you fall off a cliff five, six years down the line. But you'll see it's a much more sustainable business, particularly in the next five, six years. And we can invest in a much more prudent and shrewd way that allows good returns while we're investing to maintain production. And we'll talk about that as we go forward.
So if I go to the next slide, which is that three-horizon strategy, we switched in 2022 from transform, build, grow, which is really the turnaround sort of strategy, if you like, to one that thinks more longer-term, all the way out to sort of beyond 2030 to 2040. And that's that backfill and sustain. And important to think here that that doesn't mean you can't grow. I mean, some people have said to me that backfill and sustain, it sounds like you're standing still. Not at all. It's about focusing on infrastructure. It's an infrastructure-led strategy. It's about focusing your new opportunities around existing infrastructure so you can leverage off that. And if you think of brownfield projects versus greenfield projects, get that unit cost of development down. Get those lower-cost, lower-risk projects in the future that give you better returns.
And so that's very much the focus of backfill and sustain. And it also doesn't preclude backfilling other people's assets and infrastructure if we've got resources close to them. It's not just our own infrastructure. It's looking for backfill opportunities around infrastructure that save you having to rebuild or build new greenfield infrastructure. That's a big part of our strategy. Importantly, that's about driving improved performance through technology, efficiencies, and working on those lower-cost operations to drive value. We will be prioritizing investment in our LNG backfill opportunities, particularly over the next five, six years in PNG, Northern Territory, and Queensland. And so Barossa sort of takes care of itself, right, for Darwin. But we've got the other assets that we've got to think about backfilling and filling them up.
Of course, the immediate deliverable there is Pikka and Barossa delivering on those two big major capital projects and coming out of this growth phase to get into that more sustainable phase of operations. Our decarbonization strategy is pretty straightforward. Of course, Alan will talk about low-carbon fuels later on. What does that look like over the years? If I go to the disciplined operating model, this is the premise or the approach we take in Santos for delivering on our strategy is remaining disciplined. Sure, we have a few bumps along the way. We'll make a few bad decisions, but tell me a company that doesn't do that. Nine out of 10 is what we're looking for to call right. It's about calling them quick and moving forward, learning from failures quickly and moving forward, and continue to drive improvement in the organization.
You can see when we started off, we had a very high cost base. We had to do something on costs. And we have a mantra where we fight inflation. We try to fight inflation. Every now and again, you can see in 2022, 2023, everybody would have thought all our costs would have come down when we did the Oil Search merger, right? But when you merge companies together, there are inefficiencies that come from all of that. And you've got to work your way through that, analyze it, understand it, and then take that cost back out. And Sherry will talk a little bit about what we're doing in 2025 to drive costs back out because it's time for another cost refresh at Santos. But you can see generally we've been driving our unit cost of production down.
We've shaded out these late lives because we're squeezing that little bit out. But if you ignore that late life, you can see we're down at 736 or so just now. And we will drop below $7. We are targeting below $7 once Pikka and Barossa come online and get those volumes up. And you can see how the volumes go up, the costs go down. You can see what happened in 2022 when we were down to 683 for our long-life assets. And so if I go to the next chart and we look at what does that mean in terms of returns, we have actually been focused on this from a company that was providing no dividends in 2016 and 2017. And prior to that, it was a bit of a token dividend. We've really been focused on EPS per share growth over time.
Now, we can't guarantee we'll grow that every year into the future. We can't guarantee what commodity prices are going to do and all the rest of it. But you can see that year- on- year, the business is getting stronger. And if we just continue to stay disciplined and we stay focused on delivering on our strategy, we're building a stronger business over time. And our metric is to keep driving it to get stronger and stronger. There'll be commodity price shifts, but we cannot plan a company. You cannot take 20-year bets and adjust them every time the commodity cycle shifts. You have to take long-term strategies, long-term views on things, and believe, believe. Sound like Ted Lasso now, believe in what the end game looks like and drive all the way through. And we've been doing that.
Particularly when you see that with the CCS project, I think that CCS project in 10 years' time is going to be one of those really big iconic things that we did at Santos that we'll look back on and be very proud of as a company. Over that time, you can see the shareholder returns more than 200% since we started that transformation journey, $3.7 billion over that period, U.S. dollars delivered in dividends. And I guess that would include the buyback as well. And of course, last year, record dividends. So when we can, we will give it back to our shareholders when we can. We won't always be able to give you everything back. And I know that has disappointed some of you. You'd like it all back all the time. But it doesn't work like that.
We do have to reinvest some capital to keep it going for the longer term, and we hope we're going to get that balance right, but I wanted to finish my section by talking about what I said last year when I was here, so we said we deliver safe and reliable production from the base business. I showed you the results. We're continuing to perform safely and reliably, and the reliability stuff in PNG, a great demonstration of how reliability and safety can drive higher production and higher value outcomes. We said that we progress our major projects, which a year ago was a big call, if you recall where we were on Barossa particularly, but Barossa's now 84%. We're at 67% back then, and Pikka, of course, is 69.3%, 70%, and we're engineers, right? 69.3% is where Pikka is versus the 37.4%. We're very accurate on these numbers.
Halyard infill well . So we said we'd backfill and sustain production across the East Coast and Western Australia. And so the activities we've delivered in the last year, Halyard, good outcome there, great outcome. GLNG delivered to deliver six million tons per annum. Again, a strong sustaining capital activity program this year, drilling greater than 330 wells across GLNG and Cooper. We said we'd deliver Moomba CCS. It's online. And as I said earlier, it's stored already 150,000 tons of CO2 year to date. So well on track to exceed the target that Brian put out in the recent market communications. We said we progressed Bayu-Undan and Reindeer CCS projects. Now, I've got to be honest and say Bayu-Undan FEED has progressed well. The approvals haven't progressed as fast. And the regulatory system hasn't progressed as fast as I would have liked that to.
We're very focused on driving that harder through 2025 and working with both governments. Reindeer FEED is progressing. On the 7th of November, Australia ratified the legislation adopting the amendments to the London Protocol. That's really important because that allows the transfer of CO2 across borders. That's what we really needed to be in place so the regulatory systems can then be built to support transfer CO2 across borders, which we need to go to Timor-Leste. Then, of course, progressing our low-carbon fuel studies. Alan will talk more about that, a number of studies, number partnerships. The Moomba CCS project is absolutely pivotal to unlocking that potential in the Cooper Basin because we need CO2 feedstock to make synthetic fuels in the future. That's my section.
So what I'm going to do now is hand over to Sean Pitt to talk about the markets. Over to you, Sean. Thank you very much.
Thanks, Kevin. Good morning. I realize I am standing between everyone and coffee. I think quite a few of my colleagues were up quite late last night. So I think a caffeine injection would be quite warranted. My name is Sean Pitt . I work for Santos. Been with Santos four years. Prior to that, worked for various companies, including one of the largest buyers in the market. I used to work for JERA for some six years. Today, I'm just going to talk to you a little bit about market. I'm sure there'll be questions afterwards. It's always an interesting topic. I'll do my best not to talk too fast.
I am a marketer and a trader by background, so I tend to talk quickly, but I'll do my best to try and slow it down for everyone today. We'd like to start just on the global energy demand, and we're going to narrow down into sort of the markets that we work within and that we supply from the vast assets that we have in the portfolio, so to start with sort of global energy demand, I think one of the key things I take away from this slide and some of the market components, including S&P and others, is that the demand is increasing, and I think one of the key drivers of energy demand increasing is around AI, and we're starting to really hear this more and more and more, and it's sort of very much a news headline-grabbing sort of article.
When you're actually talking to customers and you start talking to suppliers of energy, both through electrons and others, it is really forefront of their mind. That plus growing economies, developing nations, that energy demand is increasing. It's not slowing down. Overlay that with a transition. There is a very big drive towards renewables and energy transition. We're supportive of that. The gap starts to widen in terms of how we're going to fill that energy demand. Coal will come out. Gas and oil will continue to play a very critical role within how we're going to supply that growing energy demand, both through whether it's AI, developing countries, and replacement energies. The other challenges with the renewables is that we continue to see the challenge with the pace at which renewables will come in. That will take time. It'll take more money.
And that transition is certainly moving that direction. LNG. I think every buyer, every seller, every analyst, governments, all have their version of this slide. But the one common theme is generally we see far greater demand than we have for supply. The interesting thing that we take from this slide is really from Wood Mackenzie is that the majority of the demand is in Asia-Pacific. So there is definitely growing global demand in Europe and other places due to geopolitical factors. However, Asia is still the strongest demand center globally. Interestingly, though, however, most of the new supply coming to market is not in the same region as the demand center, the largest demand center. So it's going to have to come further.
It's going to have to come to meet that large demand center and that growing demand center in Asia as it transitions and meets those challenging new energy demand centers such as AI. However, there's very little new supply or growing supply in this part of the world. I actually had this conversation with someone this morning. So for us, it presents an opportunity, so in terms of positioning in the Asian market, and as I said, that is pretty much where the largest demand center is, we're in a position where we're in the right neighborhood. We've got the right postcode, and many of the portfolio assets that we have are in close proximity to that market center. I think, as you heard before, Kevin had mentioned this. For us, that provides us a unique situation where we can leverage those portfolio assets.
If I look to the bottom left-hand corner, we have a particularly large contracted book. However, that book is built on three premises. We retain some spot exposure. We have built some midterm contracts and some longer-term contracts with end users that are looking to further decarbonize and leverage our other existing business, which is SES, decarbonized LNG, but also the fact that we are contracting such that we are maintaining a high oil indexation slope. So when I talk slope, I'm talking the 13, 14, 15% contract numbers. We're looking to try and leverage that as high as we possibly can. Really, what we're leveraging here is our low-cost, low-emission shipping position that gives the buyers a couple of advantages.
The big advantage for them is they are very focused on methane slip and their exposure to their total reportable, but most importantly, supply security and short value chain runs to market. We have probably one other significant advantage in that portfolio is got a high heating value, particularly for gas companies in Southeast and Northeast Asia. To reduce the ability to spike, it reduces costs, but also reduces handling and, again, emissions is very much forefront of their mind, and something that we have seen and coming through our contract stack is effectively, though buyers are now coming back to the market, before COVID, we started to see buyers shifting away, starting to look at whether they could look for shorter-run commitments to keep optionality open. We have seen a significant shift in people looking for 10, 12, 15, 20-year commitments to LNG. That's been very welcomed by us.
But equally, they're looking for those sorts of security commitments, but also to help them decarbonize. They can see well into the 2040s and 2050s the role that gas is going to play, and they want to make sure that that gas is available. What does that translate to? In the bottom right-hand corner, we are looking and have been able to secure quite high realized prices and continue to. That mix of spot, midterm, and long-term has enabled us to realize quite strong pricing on an oil indexation basis. The reason we keep a mix between mid, long-term, and spot is such that as we see markets shift, we can then come back and either adjust our portfolio of contracts. We might want some more JKM exposure or spot exposure.
Then we can also respond to buyers' needs too, that there is a really strong central pull for price on a pricing basis and demand center basis, that they need some additional supply or front in some new contracts. We can respond to those requests. Changing pace. Domestic gas. I think both east and west is quite challenging in the basis that there is far greater demand and supply. Both G SOO and EnergyQuest quite accurately report this. It is really a function of lack of investment to meet continued demand. However, we are well placed through opportunities like Corvus in the west, Narrabri in the east to meet that demand. But again, similar to other economies around the Asia-Pacific region, around the world, decarbonization is forefront and center, but gas will continue to play a critical role and part in that decarbonizing strategy.
If we don't continue to invest and make available new supply, we will impact the lights and power of houses, manufacturing in Australia. It will have a direct impact. But for Santos, the portfolio of domestic gas assets we have are there. We just need to be able to have the ability to bring them to market. Oil. If I could predict the oil price, I certainly wouldn't be working for Santos and Kevin, unfortunately. I would be certainly somewhere else. But I do find it a fascinating subject. Oil price, and again, there's many versions of this slide. Everyone has one. I think that one observation I'd make about oil forwards is I don't believe it really reflects the risk in the market.
Again, someone I was talking to today about this, and we share similar views, that five to 10 years ago, if somebody parked a ship in the Strait of Hormuz, we'd see the spot price go up, and it would sit there sustained until that issue was resolved. Now we have multiple conflicts around the world. We have embargoes. We've got geopolitical risk. And it seems to just be so much noise, so much risk, the market really doesn't know how to factor it all in. However, what we do see, though, is this contango structure. We see the forward price of oil higher. And that really does reflect the chart on the right, which effectively is we don't have enough demand sorry, don't have enough supply to meet the demand going forward. And that is what is supporting oil. I'm quite bullish.
I think oil over the mid- to long-term will be much stronger. We will have cycles, and we need to run the business, and again, I'm not taking thunder away from Sherry, but we do need to build our business to run on low-price oil. We need to be able to be resilient to $30, $40, $50 oil, and we contract on that basis, and we try to give as much optionality to the business to manage the business that way as it can. However, the mid- to long-term run rate is quite a strong signal for strong oil price. We should benefit strongly from that. The important thing too is that the portfolio of all that we have now, we are very much an LNG company, but we have got a fantastic set of oil assets, everything ranging from Cooper through to Kutubu, through to Pikka coming online.
We've got a very strong set of oil assets. They all generate and capture through the spot market. And that's a focus and strategy that we have to try and get premiums to that product. And if you note, the run rate is over $3 per barrel over the printed price, which is a very strong return, really. Carbon. I'll finish off with carbon because right after this, I'll go into a quick summary and then off to the coffee break. I think from a carbon perspective, and RepuTex and others really do capture this. And again, I won't take too much thunder away from Alan later on. But effectively, in 2027, we do see shortfall or an insufficient supply of ACCUs in the market from 2027. I think it's important on this first slide. We do note that it probably doesn't take account the inventory.
There's probably a lot more inventory of credits than probably reflected here. But the other factor to take in consideration too is the pace at which they're going to be required and some of the regulation and methodology the government's working through in terms of ACCU deployment is going to change as well. That uncertainty, I think we believe that it's probably close to that blue line, but there is going to be a challenge in the next 12-18 months and quite a bit of uncertainty. I think really what is interesting from a pricing perspective is the middle and last slides, where you can see the forecast from these market reports that the ACCU price is materially lower going forward out into the latter part of the decade than where global markets are.
So we can only really see that probably there's going to be upward pressure on ACCUs. From the commercial business perspective, this really does position us well for assets and projects in Alan's portfolio, such as Moomba CCS and the other CCS hubs. So we're well placed to capture that upside from a commercial model perspective. So that's really what we're focusing on. I'm just going to finish off, just a quick wrap-up, just tease out some of those key points, and then we'll get off to a coffee break. But from an LNG perspective, the strategic location is probably front and center. We have a very unique portfolio. I've worked for quite a few companies from Woodside through to Shell and JERA and others.
We have got a very nice portfolio set in the right location with the right postcode, with a bunch of customers who are desperately looking to lock that volume up for more than a decade. We recently were in the market and made some announcements about some midterm volumes. We were oversubscribed. Long-term demand. We're oversubscribed. I don't have enough product for the demand that's currently there. We offer a longer-term carbon capture and storage solution, and that has been a very important factor in some of those long-term contracts that we've entered into. In fact, there was one earlier this year with Hokkaido. It was a factor in their decision-making that we've got a plan. We've got a strategy. They bought into that. They believe it. We've got high-value LNG. We have got a very strong position in terms of both high heating value.
We've got a very nice portfolio that's now being built out between spot, midterm, and long-term. We'll continue to execute that strategy, and you'll see some more stuff coming in the future, but we will retain that ability to move between spot, JKM, and that oil indexation as the business needs to adjust to market. And we'll continue to leverage that existing infrastructure. We're well placed for domestic gas supply. We like the market. We enjoy being in the market. We want to keep the lights on. We want to support jobs in Australia and manufacturing in Australia. We just need to get it to market, and I'll just close off with the oil that we have Pikka coming. There is very strong interest in ANS. ANS, we will not take it to the U.S. We'll avoid very expensive Jones Act ships. We will bring it to the Far East.
China, Japan, Korea are looking to displace or replace existing oil feedstocks both via decline and sanctions. And there is very, very strong interest, and we see very strong pricing signals well above Brent when that arrives into Asia. Thank you.
Thank you, Sean. On that note, I think we're right on time for the morning tea break. So how long have we got with Brian? 15. 15. So let's take about 15 minutes morning tea break, and we can all be back in 15 minutes' time. We'll go forward. Thank you.
Okay, good morning, everyone, and welcome back. I've met many of you before, but for those of you I haven't, I'm Sherry Duhe. I'm all of five weeks into the company now, so Kevin nicely arranged for my onboarding that I could roll out this new capital allocation framework.
He's very into management development, so I really appreciate that. I think many of you have been perusing the slides and also commenting and questioning a bit on the break, and I'm excited today to talk to you about three things. The biggest one, obviously, being that we're rolling out to you and announcing to you today an updated capital allocation framework. Why is that important, and why are we excited about that? We're obviously coming out of the back end of what's been a major growth cycle. We've got new production coming on stream in the middle of this coming year with Barossa, and then into the earlier mid part of the year, depending on how the schedule goes for Pikka.
We know, and we have heard you, that you're really wanting us to make sure that we prioritize and improve our overall shareholder return once we come out the back end of that capital period. We could have waited until closer to those cash flows to roll this out, but we thought it was really important to show that commitment to you now. In a few minutes, we'll take you through the principles and why we believe that that will offer sustainable, improved shareholder returns over the cycle. I'll also briefly today talk about how we're going to continue to drive the disciplined low-cost operating model. In Kevin's reference, we're going to be putting a big priority on a refreshed cost out across the business in 2025, so I'll give a bit of a preview of that.
Then last but not least, I'll talk about the healthy and diverse portfolio we have to feed that capital allocation discipline for not only the next five years' horizon, but also for many years into the future. So can I go to the next slide, please? But before I go into talking through the four elements of the framework, I just want to spend a minute refreshing and reminding on the strength of our balance sheet. You've seen these decks before, and the important thing that we'd like to note about this is that we have a very strong and stable track record, really going back to 2016, of maintaining the same investment-grade credit rating.
That is something that's been really sacrosanct to us to make sure that, given the cyclical nature of our business, that we always have a strong balance sheet, that we have a competitive cost of debt funding, and that we've got flexibility to access that at different points through the investment cycle, and again, regardless of what's happening with commodity prices. I won't go through all of them in order of time, but we've had several things that have happened just even in the last few months here in terms of our financing activity that demonstrate the health and the basically robustness of that framework. We've got over almost $4.3 billion in liquidity, and as we look at our target gearing range, that remains unchanged. We have that at 15%-25%.
We think that really keeps us very well positioned in that strong, stable investment-grade credit rating and also gives us a lot of flexibility as we go through to manage our balance sheet and, again, prioritize improved shareholder returns as we come out the back end of this major investment cycle, so we can go on to the next slide, which is really the center of the updates today. Now, there are three principles that have gone into this. The first one, obviously, is the table stakes of having a strong balance sheet. The most important one sitting in the center is, as I've mentioned, improved shareholder returns.
There's no doubt we've heard you loud and clear that you don't want us to go through, once we come out the back end of Barossa and Pikka, and invest in two major mega projects at the same time, certainly not at the same working interest, and we're planning to act on that, and we're planning to deliver on that. So what does that mean? There are four elements. Gearing, I just talked about. The main element and the key change here is that we're moving from what has been a free cash flow from operations, which in our definition has included sustaining capital, to really, as Kevin also referenced, move to an all-in free cash flow metric. Now, some of you will say that sounds like a downgrade immediately because, "Aren't you just going to go and spend all of that on capital again?" Well, it's exactly the opposite.
What we're looking at is that the way that we can demonstrate to you post-Barossa and Pikka that we will prioritize shareholder returns is to hold ourselves to account very simply and very transparently that every single dollar we spend, whether it be major development CapEx, whether it be sustaining CapEx, and of course our operating expense and corporate cost, that we are spending that in a way that prioritizes an improved return throughout the commodity cycle, but also helps us keep a sustained production for many years to come. We've recognized, and this is not unique to us, I think across our sector, that from an investment thesis perspective, you're not interested in us doing boom or bust.
You're not interested in us coming back out in a few years' time and saying that we're going through another growth cycle that will have suppressed shareholder dividends for some period of time. Rather, what you want is a sustainable and an affordable CapEx level that generates predictable and reliable all-in positive free cash flows so that with that, you have a positive dividend throughout the cycle, but you also have long-term growth from an overall shareholder investment thesis. Now, how do we make sure that equation works so that you don't run it through your models and come up with a negative number? There are two pieces, and they work together. The first one is a production range that we're really focusing in for the next five years on 100 to 120 million barrels per annum.
Now, you've seen previous long-term indicative production profiles that we've put out that have talked about a range that's wider than that, that goes from 100 to 140. And certainly, when you look at our funnel, there's many different ways that you could think that we could actually go after that 140 pretty quickly and probably deliver it. However, if we did that, particularly in the next five years, what you would find is that we would bust out of that capital ceiling from an affordability perspective and not be able to offer you an improved return in the short run. So we felt it was prudent, and I'll come back in a few minutes to talk a bit more about why 100 to 120, that we put that range in place for the next five years to demonstrate that discipline on capital to support that range.
The other piece is that we're putting a capital ceiling in place. And we've had many debates as management on a board around how do we give you confidence now, given that it's two years out, that that will run through your models and have an answer that is as good, if not better, than the model we have today. And that's going to come as we get closer to 2026, but the thing that you have to understand about that is that it works as a formula. So each year, what we need to do is come up with a budget and a plan that, at very conservative commodity planning prices, because that's what we always do, we don't count on high prices to deliver those outcomes, that we can go through and have significant all-in free cash flow and that we can prioritize that return.
So what that also means is that every project in the portfolio has to compete absolutely against our hurdle rates, and it has to compete against returning it to shareholders within that production range. So when you think about those all-in, we believe that that actually holds us to account as transparently and as simply as you can imagine that every dollar we spend will be well spent and that that improved return will happen throughout the cycle from 2026 when we're targeting this coming into place. Go on to the next slide, please. I won't spend much on this slide. This is really the format that you're normally used to seeing when we talk about our current framework.
Just a reminder that this is targeted to come into place only from 2026 when both Barossa and Pikka are on stream, and so until then, we'll continue with our current framework. Maybe just two things I'll talk about here on this slide. One is that you indeed should think about the all-in free cash flow as not that we're going on a diet, because somebody asked me on the break whether or not this is us putting ourselves on a diet. And I don't know about you, but each time I go on a diet, that puts you back into the boom-bust cycle of if you haven't started eating healthily and you haven't started exercising, it's just going to come back again and it might get worse. So I think that's not the analogy that I would use.
What I would actually use is we're adopting a sustainable lifestyle in our capital spend, and what that means is that we want to make sure, building on the 10 years of success we've had, to have a healthy funnel, to have a very steady base, that we put enough capital back into the funnel, but not too much, so that we continue to offer improved shareholder returns both now and the next five years and many years into the future. The other thing I would point out around this slide is that we talk about returns of at least 60% of all-in free cash flow per annum. That could go up to 100% in any year.
And we're also setting ourselves an additional belt and brace around that, that if we get below the bottom end of our gearing range, we will pay out 100% full stop of all of that free cash flow to investors. So even if we get below the bottom of the gearing range, we won't then allow ourselves extra room to spend more capital. We'll keep that discipline regardless of the gearing. Next slide, please.
Now, this slide is really, really important, and it is the key piece of information that you should be aware of today that gave us that confidence that the $100-$120 million is the right level to target over the next five years and that it affords us a lot of room to be very disciplined in our capital and not have to spend amounts that would result in a non-attractive all-in free cash flow. So what this chart shows, and I should give the usual disclaimers that this is not guidance, this is indicative, and this is something that we'll continue to update each year in our annual guidance.
But what it is, is a modeled assumption of our base business, and that includes Barossa and Pikka phase I coming on stream and one time in PNG in Papua New Guinea that is an assumption because it hasn't been decided on yet, but much more like a sustaining CapEx backfill in PNG rather than major development CapEx. So what that says is, if you look at this line, even if we do nothing else on any major project development across the whole global portfolio, we will stay in that range of 100-120 million barrels just on the base business between now and 2030. So that quite simply is what gave us the confidence to say that we know we can deliver in that range over the next five-year period and, again, offer improved shareholder returns under this more comprehensive dividend and payout model.
Now, of course, we will do other activity during that period, but we've got the luxury of choice, we've got the luxury of timing that will allow us to do that in a phased way and in a disciplined way. A lot of companies of our size and even much larger would die to find themselves in this position where you've got more opportunities than you can possibly spend on, but your production is not going off a cliff anytime in the near to midterm future while you make those decisions and phase that into the future. So that was really important for us to say. Next slide, please. I said I'd say a few words on cost, and I think we've already said what we're going to do.
I would just refer back to the graph that Kevin has already showed you that we're very proud of our track record of being very competitive on cost at the same time as we look at where we are coming out the back end of COVID, coming out the back end of several transformational acquisitions into the portfolio, and also coming out of the back end of major project delivery that it's time to look again. So when we look at the cost where we are today, we feel good that we're competitive, but we want to do better, and we will do better, and that also gets encompassed into that all-in free cash flow calculation because every dollar we spend that is unnecessary and is uncompetitive is a dollar that can't go back to you.
So what we'll be doing in the course of 2025, and we've already started on that, is really looking company-wide, both at the asset level from a unit operating expense basis, but also all of our above asset cost, and really looking to see what can we do to reset those where possible, taking action to put that in place and really setting a new baseline run rate from 2026 and forward. So more to come on that as we get into the coming year. Next slide. Okay, last slide before I turn it over to Brett. Hopefully, this just illustrates what we've been talking to you about for some time now, is that we are in a very enviable position as a company. We've got a number of projects. Don't look at this as a time scale. We've got a number of projects that are different levels of maturity.
Brett will go into for his portfolio how those are very advantaged in terms of existing infrastructure, in terms of our backfill and sustain strategy that we've been talking about for quite some time, and we've got projects that are coming through that are already, of course, benefiting the cash flow in the next year to two, and what we will do in a very disciplined manner is look at how we take those through.
They won't all come through at the same time, but again, it is a luxury of choice that allows us to basically make the best decisions that we can make now, keep that production stable and profitable for the next five years, and build a portfolio that can deliver, we think, sustainable and attractive returns for decades to come, which is, again, something that we've been building up for many years now and we plan to pursue as we go forward. So I will probably stop there and turn it over to Brett to really do a deep dive into his part of the portfolio.
All right, thanks, Sherry. I'm Brett Darley. So I lead the Eastern Australia and PNG business, so that includes the Cooper Basin, GLNG, and Papua New Guinea.
So look, firstly, I want to recap a couple of things, or I want to recap on our infrastructure and our asset position. I think it's important to have a look at our privileged assets. Sean's already talked about the proximity to markets and their advantaged, not just position, but relationships with long-term customers as well, which is incredibly important. I'm doing the slides, aren't I? I wanted to then look at our portfolio. So I want to take you through the incredible amount of options that we have and then how they could fit into possible backfill strategies. So again, the best value for us is to keep our facilities full. Not building new greenfield LNG facilities gives us, again, a massive advantage. And a lot of our portfolio sits within striking distance of our current LNG facilities, which again gives us a great advantage.
So look, I'm going to start through. I'm going to go through all of our LNG facilities. I'll start with PNG. I'll look at GLNG and DLNG as we go through, and I'll give you what we're planning to do or some of the scenarios that will actually fit those backfill strategies from a short and a longer-term perspective. PNG LNG, this is a world-class asset that's been producing since 2014, and I'll go through a map in a second, but base production coming through the Hides foundation field and through Kutubu from our operated assets and Gobe and Angore, which we spoke about now being online. Just to give you a little recap on where the infrastructure sits.
So if you look at where our facilities are, we operate the APF and the CPF, so traditional oil-producing assets that are now becoming part of the PNG LNG gas business. And they were part of the original project development that was sanctioned. So CPF has been producing gas into the Hides gas for the last few years. APF is currently recycling its gas. So we produce oil from the APF at Agogo, and we inject the gas back into the ground to be used later. So that's the tie-in of that, which is about a 30 km pipeline. So again, simple tie-in to be able to produce that gas going forward. It's a matter of when we do it, not if we do it. So we're looking at the best timing for the APF tie-in. All the way down, you'll see our export oil line that comes down.
There are two pipelines. One that goes to Caution Bay at PNG near Port Moresby, which is where the LNG facilities are. All of the current export liquids being produced are exported via our oil pipeline that currently exports at the Kumul Marine Terminal in the bay there. That includes PNG LNG's oil operated by Exxon and our operated oil coming from the APF, CPF, and Gobe. We have a deep understanding of PNG. We've been operating there many years. As Kevin said, we've been producing about 25% of the feedstock gas for PNG LNG. That's backed off now with Angore coming online, and we actually have gas behind valve now. We have the facility full, and we actually are choking back gas because we have too much gas to produce up there at the moment.
But if you look with the next development, Papua, which I'll talk about in a little bit, scheduled for FID next year, and I'll go in a little bit of detail on that, but you can see that down in the Gulf and then P'nyang. So in our sequence, again, another large project and some discovered resources on the way, which I'll talk a little bit about in an upcoming slide of Juha and Muruk. If you look at the Papua LNG project, it is a backfill and an expansion project using existing and new LNG production at the PNG facility near Port Moresby. Nine wells, a 320-kilometer pipeline. Post backfill, we're 17%, but we also receive considerable value from sharing or from allowing Papua to use the current PNG infrastructure. That's in tolls and access fee and sharing OpEx as well.
So we're working very, very closely with the operators there. Again, sharing our knowledge as well with the operators and what we've been doing in PNG and targeting FID in 2015. But how do we keep PNG LNG full until Papua comes in? So CPF optimization, we talked about getting reliability up. That's value that we've added to the business since we've taken it over. That's value that wasn't attributed to that business until we brought in our experience in running older assets. So we had teams from the Cooper Basin come up and assist the guys in how to get more reliability out of those machines. We don't have a lot of backup there. We only have three machines there. So getting them to run full-time flat out has not just been a challenge, but we've achieved it. So that's tick. We've done that.
Angore development takes 350 million a day now coming into PNG LNG from those two wells. Fantastic result there. Again, world-class reservoir and results from a production point of view. Hides F2, that's been spudded. So that's a well that's been drilled from an existing well pad at Hides. So this isn't a new well. We're using an existing well pad, and we're targeting the footwall. So this is a new play that has not been drained in the Hides field itself. So it's an exploration target. We're really excited about it, but that could be online very quickly from an existing well pad producing straight back into that queue. At the moment, we can't use it because Angore has got it full. But as the fields decline over the next year or so, then Hides F2 could come in.
If that exploration success doesn't occur, this will be converted into a development well from the Hides gas field as well, and it'll give us additional backup and acceleration. The APF tie-in, up to 250 million a day coming from the gas that we have, which we know about. This is a proven resource or reserve that we know very much and we're very confident about, and that's just a matter of timing how and when we do that project. And then even grinding away, which is what we do, and we've got a lot of experience in making sure we eke out the last little bits of value. Gobe was meant to be finished up in the next year.
We're looking at pushing with using, again, some of the learnings out of the Cooper Basin to try and get our cost down and continue producing that and getting the last value out of the Gobe field, and I'm confident we'll push that even out past 2028, then if we actually look at our development opportunities, I talked about Papua, a project that currently we're working very closely with the operators on, P'nyang, discovered resource, Muruk, discovered resource, and Juha, discovered resource. The thing that's good about Muruk and Juha, when we look at them, they're on the way to P'nyang, so there is some optionality of potentially building and developing these things on the same route that we'd be taking to go to P'nyang.
You could potentially do these earlier as part of a stage development and develop Muruk and Juha and use that infrastructure later and extend that to P'nyang or any other combination of that. And then what we're very excited about, and this is one of my things that I'm very excited about, Eastern Fold Belt and particularly a prospect called Wildebeest, now a massive resource play up there as well. So not only do we have near-term opportunities to keep the facility full, we've got a pipeline of discovered resource here, world-class discovered resource, and even exploration upside. So PNG is well positioned to keep that facility full and potentially expand that over the next out till 2040. And that shows you there. That's a scenario of what it could look like with our upside and backfill and sustain options in there at the moment.
Keeping it full, the only little dip there, there is a 30-day shutdown planned for 2027, so you'll see that's just one month of production coming off. Other than that, Papua stays full. Sorry, PNG LNG stays full and increases as we see Papua expansion trains come online. And I mean, you look at the large reserve and resource base there, 1.4 billion barrels of oil, incredible reserve base and resource base there. So Barossa and DLNG, look, pretty simple story on Darwin. If we go to the next slide, Darwin is kept full by Barossa well out past 2040. There is the option for Caldita to come in at some point, but that is way, way out there. That's probably within the realms of production uncertainty, to be quite honest. So pretty simple. Barossa keeps it full. What's the opportunity though at Darwin? We do have the ability there.
We have the approval to actually expand Darwin LNG to 10 million tons per annum. So it has expansion capability up there. It also, looking at off the back of our success at Moomba CCS, the ability for abated LNG production, and we'll talk about that, or Alan will talk about that in the future. But pretty simple story on Darwin LNG, room for expansion, and that plays into, and I'll talk about at the end, one of our potential resource plays in the Beetaloo that provides an export opportunity and potentially could fill that to another train at Darwin.
East Coast LNG or Gladstone LNG. I know a number of investors actually got the opportunity this year to come up and have a visit, and I know most of you are impressed by the professionalism of the team and the state of the facility up there, so thanks for coming up. Again, we've looped in here, so we've got four foundation fields in Queensland that are the GLNG joint venture operate between Fairview, Scotia, Roma, and Arcadia, and then our fifth field being the Cooper Basin, of which over 90% of our gas currently goes into GLNG for export. That's the way we look at GLNG. And then if you look at the profile that we have for this facility at the moment, currently producing at six million tons, the green wedge there is the third-party gas.
You can see our current equity gas, so the gas that's coming from the four foundation fields is increasing. So every year, up until 2030, every year, every day, we are trying to break the record for our LNG, or sorry, our equity gas that we put into the LNG facility. You can see then the Santos Equity Foundation gas supply, a horizon contract coming off in 2030, and that's going to be a great time. I'll talk about the Cooper in a second, but a great time for us to look at where we put that gas. The domestic market, the LNG market are very strong around that time for us, and that'll be a decision we make. But you can see we're actually displacing our third-party supply. Kevin talked a little bit about how we've been doing that over the last couple of years.
We have expansion options, not just in the Cooper, but we also have in uncontracted gas, which you can see there, and I'll talk about that in a little bit, but we do have some growth options in Eastern Queensland as well, which we can pull the trigger on, and we're working with the joint ventures on deciding how we'll put that through the facility, and then ultimately, the Beetaloo is such a large resource. Again, this is a scenario, not a forecast, but that's how big the Beetaloo is. We could fill GLNG, and we could also fill another train at Darwin as well, and it's our decision how quickly we would develop that, so I won't dive into it yet, but the Beetaloo is scalable. It's something we could decide how big and when and where that gas goes.
A lot of options for us in the future. Cooper Basin, I touched a couple of these points here, but you can see it's well positioned for export, whether it's going into the domestic gas market or into GLNG. We've got some good options there, 90% of it going into the GLNG right now. Good pricing outlook, as I said. We continue to unlock more hydrocarbons in the Cooper Basin, and I'll take you through why we think we can continue to deliver that over the next 20 years. Not just continue to deliver it, but the option to actually increase it from the Cooper Basin. That's all around. We start with the rocks, but then we also need to look at how we can bring that reliability up, get our costs down, and some of that, and actually open up capacity by modernizing equipment.
But very targeted areas of where we will do that. So being really targeted, understanding the basin specifics, and over the last two years, we've spent a lot of time trying to, and not trying to, but actually understanding where our costs are, where the cost should be spent to get the best bang for the buck. And ultimately, where our peripheral areas are, we need to make decisions about what we do with those. But growing production in our best areas cost-effectively. And then Moomba CCS, we've talked about a proven technology now that makes the Cooper Basin a really exciting hub. So not just for hydrocarbon production, but for other things as well. So a long future in the Cooper. So this is the story, and people may have seen this presented in a number of ways. So why do we believe in the Cooper going forward?
You actually have to look back to look forward with the Cooper. The engine that drives this is 2C to 2P conversion. There's two separate graphs here, but the one on the left shows you that if you actually took the reserves we had in 2003, we have produced far more than that in the last 20 years, and we still have reserves at the end. If you look at that story, if you'd made decisions on a 2P profile in 2003, they would have been the wrong ones. If you look at what we currently have now from a resource point of view, a 2C at the end of 2023, and look at converting that into 2P, we have a story. We actually have a plan, and we're confident we've got production well past 20 years in the basin.
So look, again, if we look at the Cooper Basin, we start with the rocks. So where are our best, the largest areas of our existing and remaining resource sit right around Moomba. So that's where we should be focusing our efforts. So the central fields, the northern fields, those reserves and resources are our biggest opportunity. They're central, so from a cost point of view, they're around our existing, right in the center of our existing facilities, and that gives us an advantage as well. So we're not at the far edges of our basin. And this basin is 130,000 square kilometers. England is 131,000 square kilometers. So we are centering our efforts in the center, our homeland of the basin. And there's a couple of different plays in each of these areas that I'll talk about.
So one, Moomba, we've got the Granite Wash and Moomba Patchawarra, which I'll talk about. And in northern fields, it's Deep Coal. So these are the new plays that are supplementing our current production from our traditional reservoirs. But when we start talking about modernizing and trying to reduce our costs, obviously being close to our major facilities means we can, if we want to electrify, it's less distance to travel. If we want to have people coming to the facilities or we want to have equipment moving around, this gives us a cost advantage as well. So look, I'll cover each one of these plays. Moomba Patchawarra, this really isn't rocket science. We've got multiple, many, many penetrations into the Patchawarra, which is one of the deeper reservoirs that we have out in the basin. We know it's there.
It really becomes down to how do we get it out of the ground economically, and it's not one thing for the Patchawarra play here. It's about getting costs down through pad drilling, simultaneous activities, technologies that we can use. It is a bunch of little things, a relentless pursuit of performance to actually get the cost down to turn this from a resource to a reserve, so we're not just talking about it. We've just done two campaigns, one in Moomba South and one in Moomba North, that were proved that this is successful. The problem we have now is these campaigns have got gas behind facilities. We do not have the infrastructure to be able to flow the gas that we actually have drilled here and we've exploited.
If we want to do more of that, if we actually want to target this, we actually have to upgrade the capacity to be able to produce more from this area. Otherwise, we're forced to drill in areas that have a higher development cost than this area here. So that's Patchawarra. In the same field in central, you've probably heard Granite Wash. So we've been working on this for the last year or two, or more than that, two years, again, to prove up this resource. So this is really a technology play. Again, a lot of the things that we're doing in the Moomba Patchawarra are about getting costs down, apply to the Granite Wash. But this becomes a temperature issue. So really, really hot rocks in the Cooper Basin or an old continent, very weathered, lots of. I think I got that right, Rebecca.
I didn't think that, but this is a temperature profile so normally we're used to seeing geological profiles, but as we can actually drill horizontally here, so these wells will not work with vertical penetrations in one frac. We actually have to go horizontal. We have to frac it to get this resource if we're targeting it specifically, and we've been limited to being able to drill horizontal wells with the technology we need to use to be able to go horizontal and steer them properly. The temperature breakthroughs that we've been making with our providers continue to open that up so as we get tools that work in hotter and hotter climates or hotter, hotter rocks, then those contours open up. We've got some good results. We're actually delivering a high side. I think Kevin talked about it. It did start out very strong, but it has come down.
It's doing about 2.1, but it did start around the eight million mark on that well, and we're continuing to push those. We have a plan to do more wells in this area and continue it. Both of these plays we've been working on for the last two years, and we're now confident to show you the results on them. How does that fit into what we want to do with the infrastructure? I want to drill more wells there. I can't because I don't have the capacity. Moomba Central optimization. It sounds grand. It's not that grand. Getting rid of three manned facilities, the oldest ones we have, the most unreliable facilities we have, and changing them out for electrified facilities that are remote operated, unmanned, with very high reliability.
Creating capacity that we can drill more wells there and produce more gas out of this area, which is where I want to focus my cost. Even on a like-for-like change out of the equipment in that area, it's a 20% cost reduction without assuming the development opportunities that we have. That is purely like-for-like equipment cost operability. Then northern Deep Coal, big play up here, really exciting. We continue to invest in it. We do have a lot of penetrations again through this as part of other wells that have been drilled. So we do have a lot of information on the Deep Coal. It's about how we actually exploit the Deep Coal cost-effectively. We've just had a good result here with Gloss One. That's a vertical well.
We're planning our deviated wells, and we're going to learn as we go along over the next two years and go from deviated and then into horizontal. But we're sort of confident we'll get some good results out of the deviated wells, but we'll take that journey slowly. But that's a huge resource for us. And then Beetaloo. So this is one we're really excited about, and we're starting to see other operators. So we're leveraging some of the work other people are doing up there. But we actually are in the sweet spot. We believe we have the sweet spot in the McArthur Basin, the Beetaloo being a subset of that. But we're talking tens of TCF of gas, tens of TCF of gas. This is gas that would fill GLNG or train two and keep GLNG full.
So we want to spend some time making sure we develop it. It's scalable. It ends up being something that we'll be good at. It's a drill-to-fill operation that then we can plan our capital on. So again, fits very well into our operating model. The thing we also like about it, it's analogous to shales that are currently being developed with current technology in the Marcellus. So this isn't inventing the technology. This is leveraging technology that already exists large scale in the U.S., and I'll show you why we think it corresponds to the Marcellus. Again, this can go north or south. It could go to Darwin. It's well positioned. We're looking to actually do some further appraisal in 2026, and we're really excited about just how supportive the new Northern Territory government is to actually exploiting these opportunities. So fantastic resource for us.
And I suppose just to give you a bit of detail. Look, this is just a type curve, but again, showing what's being developed in the U.S. and what we have seen from our well. So this is actually a well we drilled, and you can see it's very, very close to that. So lots of work being done, but we are confident this matches or is as good as a U.S. shale play that's currently being exploited economically on a large scale. And we've got a great bit of that postcode. So look, just to summarize, we've got three LNG plants, fantastic privileged assets in great position, linked to a great market with good relationships. How do we keep them full? PNG, lots of short-term options that we're ticking off already. We've got long-term optionality as well.
Again, to keep that going and potentially expand it out till 2040, GLNG backfill opportunities, not just using our foundation fields and increasing supply from our foundation fields, but looking at what we do with the Cooper going forward, particularly in an expansion case. Then with the Beetaloo coming in on the back end, lots of opportunities, lots of options. As Sherry said, we're blessed with options, but it's really up to us to decide how we play that out and what is the most economical way for us to spend our capital going forward. Certainly, from a scenario point of view, we can keep these facilities full, and this is the best place to spend money putting gas back into facilities that are already built.
So I hope that's given some confidence that we can continue to supply these three assets with gas, not just in the short term, but in the long term as well. So I'll pass it over to Alan. Please.
Thanks, Brett. Please do. Good one. Thanks for your time. Morning all. Thanks for the opportunity to fill you in on where we're up to on the Santos Energy Solutions side today. I want to cover three things today. Firstly, give you a reminder of what's in the portfolio and the cash we're already generating from the midstream assets and the fact that that is very privileged infrastructure we're sitting on there. I'm going to talk a little bit about the moves that we're making towards building that commercial carbon management services business model at scale, which is a really important piece of the puzzle.
And then just to talk through the portfolio development and, importantly, the carbon price exposure that's going to bring. Next slide, please. So just as a reminder, what's in the portfolio today is really the east coast and then the northern part. So eastern is centered around Moomba, but integrated therein with Port Bonython as well. And then in the north, we've talked to Darwin LNG already, but I think the point to make here is there's capacity in each of these facilities. They're contracted today on medium to long-term contracts that generate really, really nice set of cash flows, but there's running room as well. So when Barossa comes online, that's going to make Darwin a bigger contributor into my bit of the business.
And importantly, the low-cost operating model that we've talked about for upstream applies as much to the midstream part of the business as it does to upstream. We're very focused on bringing costs down and eking out more margin. But importantly, Brett's mentioned the Cooper optimization play in his part of the business. That's very much embedded in what we're doing in the Cooper as well. So that dovetails very nicely. Next slide, please. In terms of the portfolio we're building today, I've been in the seat for coming up to 18 months now and pretty proud of the way that we've made it a lot more targeted. When I joined, there was a lot of activity around different prospects, different opportunities. And hopefully what you see from the slides that follow today is we've really tried to streamline that.
Very conscious as well of the capital allocation framework that we've got. We're competing for capital with the upstream part of the business as well. So we've got to find projects that hit those hurdles. The big thing that's probably changed on the midstream side in the last 12 months or so, obviously, is Moomba CCS phase I coming online. We've got revenue coming through from tolls there, and we'll get our first ACCUs in the early part of next year, which will generate more revenue. And in terms of the commercial model that we're looking at putting around that CCS portfolio, it's really simple. We're going to charge people CPI-linked tolls, and we're going to get carbon price upside. That has really got traction with customers and has simplified what can appear a complex conversation.
And you can see there with the three hubs that we've got around Bayu-Undan, Reindeer, and Moomba phase II , which I'll talk to you about in a minute, that is really where we're focused. In terms of tech development, it's important to note that one of the constraining factors around CCS is market size. But not market size in terms of prospectivity. It's how you actually get the carbon in a pure enough form to where it needs to be for us to sequester it. So we've got to understand things like direct air capture, point source capture. You might hear it called post-combustion capture. These are not areas where we're looking to put huge amounts of capital, but if we don't look to understand those and look at how they can feature into the supply chain, we'll miss a trick.
And then on the right-hand side, customer-led future growth, which is really around low carbon fuels. In the past, we've talked about numerous different options for that space, but we've really honed in on synthetic gas. You hear the Japanese refer to it as e-methane, but that's a product that can be used in existing supply chains and we think has very good prospectivity. Next slide, please. So this is a reminder of the operated CCS hubs that we have, and we've really tried to simplify this. In the past, we've talked about them being CCS and low carbon fuel hubs. In practice, where we are today now is these are CCS hubs.
We have low carbon fuel option at Moomba, which I'll talk to separately, but we've got these three hubs, two of which offshore with very close proximity to Asian emitters, but also onshore emitters in the case of WA as well. I'll go through each of them one by one in the subsequent slides. The way to think about these is huge, huge storage reservoirs. Depleted reservoirs are an infrastructure of sorts. When you combine them with the pipelines and the facilities that we've got at each of these locations, that presents a very, very compelling opportunity that we're looking to monetize. There's some mention on the slide here about the MOUs we've got in place. Not looking to make a huge deal of those today. We've got to convert them into binding contracts.
But nonetheless, when we sign these, we enter into a unique dialogue with the customer, and they're structured in such a way that we look to progress them. If they don't go to a certain level, we then refocus elsewhere, so we're very, very targeted about who we speak to in each case. Next slide, please, so we're just going to run a quick video here, which shows a time lapse of the construction of Moomba phase I, and I'll make some comments on that after. Sunlook is, as we mentioned earlier on in the piece, that's 230,000 cars equivalent a year taken off the roads, 10% of South Australia's state emissions on an annual basis, and five years of hard graft by a lot of people in the organization.
It's a project that we are super proud of, as we should be, and it's acting as a catalyst because what it allows us to do is have conversations that are now much more steeped in sensible dialogue than the myths that were there before this came online. What we are very, very privileged on is the fact that we've got a South Australian government who is absolutely bought into what we're trying to do at Moomba. Please don't underestimate the value of that. You can see in other parts of the business the challenges that we're having, getting approvals and getting frameworks in place and the like. Having that government support there and a framework allows us to do what I'm going to show on the next slide.
We've proved the concept now, and we're building credibility with that 1.7 million ton run rate in Moomba phase I. Now where we're heading is phase II, which, as you can see there, is two to 10 million tons a year of additional volumes to be sequestered. That is going to be a combination of domestic and international supply to bring that in. It will require new infrastructure. We're working with the teams to do studies to ensure that we're putting those pipelines in the right locations. There's various options around that. But importantly, what we are doing as well is working very closely with international customers. We've announced a number of MOUs with counterparties from Japan and Korea in order that we can try and piggyback off the fact that their host governments are very, very supportive of getting CO2 across international boundaries.
It does require our government to step up, so I'll talk about it a little bit on the subsequent two slides, but bringing international volumes to Australia is going to require action by the government as well. One of the questions I often get asked around international importation of CO2 is shipping. Clearly, that's a critical part of the supply chain, and if you look at the case study that's emerging in Europe at the moment around the Northern Lights project, modestly sized vessels, but nonetheless, they're bringing the chain together. Moomba is a very similar size, phase I , to the Northern Lights, and as you can see on the slide there, we'll see the first Korean-built CO2 carriers come into operation in Q3 of next year, and actually, Japanese shipping lines have also piloted them as well.
While that is not in place at scale today, it is not something that is many, many years away. Next slide, please. Bayu-Undan, this is a really exciting, large, and scalable project. I mentioned that point, scalable, because to FID this project, we're going to be focused on sequestering the 2.3 or so million tons from the Barossa project later in this decade. From there, what we will look to do is build for international volumes as well. We can take this up to 10 million tons, but the first thing, and this is my absolute focus for the next 12 months or so, is getting the fiscal and regulatory regimes in place with the Timor-Leste government, getting the G2G arrangements in place between Australia and Timor in order that we can get the volumes into that depleted reservoir at Bayu-Undan.
So a really, really exciting prospect and, again, that linkage back to Barossa. Next slide, please. Western Australia CCS really has two components to it. We can make this project up to five million tons, but in the first instance, we're looking at the Reindeer CCS project, again, using the depleted reservoir there, which will be around one million tons. So we have made very, very good progress with a couple of customers, and we are moving closer to a binding arrangement for landing those volumes. We entered feed in the first part of this year and looking at feed readiness in 2026, again, targeting first injection at the back end of the decade. Working through the approvals, very much in the same way as Bayu-Undan.
This one's a little bit simpler because it has that pure Australian perspective to it, but we have made good progress on feed, in particular the engineering studies, and we recently lodged with the regulator what's called the Declaration of Storage Formation, which is effectively a precursor to applying for an injection license, so that's tangible progress. Next slide, please, so coming back to Moomba now and the low carbon fuels project where I said earlier on in the presentation how we've really looked to focus in on a particular opportunity in low carbon fuels, not be all things to all people. I suspect people in the room have been tracking the reality check that has emerged around hydrogen in the last little while. We are not anti-hydrogen. We think it has a role to play.
And indeed, in the synthetic fuel production that we are looking to develop, hydrogen will be part of that chain, indeed combining it with CO2. However, it's the transportation method that differs here, and it's a very, very major competitive advantage because you can avoid all of the very prohibitive costs associated with having to develop new infrastructure for hydrogen and blend or drop in these fuels into existing supply chains. So whilst we've worked initially with Japanese utilities, the top three Japanese utilities, this is a product that we could use, that our JV partners could use, that domestic customers can use, and you can evacuate it through existing infrastructure. So whilst it's not where it needs to be on the cost scale at the moment, it is something that is increasingly prospective and part of our portfolio. Next slide, please.
So I'll use this slide to really bring together what I've said. Kevin introduced this at the front of the pack, the carbon capture and storage targets that we've set around Scope 3 equivalents. And to take you through really what this means in practice is that we now have a target to sequester safely and permanently around 14 million tons of CO2, of third-party CO2, by 2040. It's an ambitious target. Make no doubt about that. But the reason we've got confidence that this is deliverable is really two things. Emitters are looking for physical solutions to decarbonize, especially in hard-to-abate sectors. So the conversations and the dialogues that I referred to earlier in the presentation give us confidence that as we get through the next few years, there is going to be demand that is going to uptick as well.
If you look at the IEA numbers out to 2040, even though this looks like a nascent marketplace today, what you can see there is it develops and it plays a very, very major role in decarbonizing this part of the world. So we've committed to that. Final slide, please. So just to reiterate some of the things I've said, we're blessed with a contracted cash flow generating portfolio of midstream assets. We're starting to generate ACCUs, which brings a new complex to the business. It's privileged, irreplaceable infrastructure, and we're going to backfill and repurpose around that. We're building that commercial carbon business for third-party supply, and we're going to do it at scale. That's the pathway we've discussed, and we will exercise portfolio discipline, make no mistake. That's all I had. I think we're now going to Q&A.
Okay. Well done, Alan. Thank you very much.
I think you're just staying up here, I think, Alan. Yep. If I could ask Sean, Sherry, and Brett, I think, to join us up on the stage, and we'll go straight to Q&A. And like I said at the beginning of the day, if we could limit to two questions each, please, because there'll be a number of people, I'm sure, with their questions. Just let the presenters take their seat. And I'm going to throw a lot of the questions to the team here. Make them earn their corn today. So go for it. Who's Dale? Dale first.
Thanks. Dale Koenders from Barrenjoey. Thanks for the updated capital allocation framework and comments. I guess I just want to tie back to some other comments you've said in the past, Kevin, around 6% CAGR in growth. Growth really wasn't much of a conversation.
I don't think you mentioned the word Dorado today. How are you thinking about that outlook and progress for growth projects? Is it still unchanged? Is views on spend on growth still unchanged?
Well, look, I mean, I think I'm going to throw it to you, but you asked me specifically, so I'll start this one. I think Dorado is just in the bucket with the rest of the projects is going to compete. And what we're seeing is that our disciplined operator model, which has been applied to our operations essentially for the last sort of best part of a decade under the new capital allocation framework, means that every project's got to fit within this new framework, and they will be competing for capital. There'll be certain prioritizations.
Obviously, in the short to midterm, we want to lock down those backfill strategies for the LNG facilities, and so there's going to be a prioritisation there, and then whatever's remaining in those capital ceilings, now, Sean, Sherry, you talk about that, all of those projects will compete for that, and so I think what we'd be seeing is on a go-forward basis, as opposed to trying to think of everything piling on and growing rapidly in the short term and doing everything at the same time and chasing production, we're chasing shareholder return growth over production growth, over barrel growth, and so from that point of view, it's probably a more sustainable growth rate in the future and not chasing everything at once. Sherry, what do you want to add to that?
Yep. I think you've said it perfectly with that example.
I think the only thing I would just underline is that as we move out of this major growth phase and given all of the optionality we have, it's a wonderful problem to have, and I'm looking at Rebecca, who heads up our portfolio team that's in the audience with us today, as that we're really moving towards, which is another reason why we wanted to roll out this framework today. You don't just make these decisions when the projects are ready to take FID.
What you do as an organization is think carefully about how we phase the de-risking and the maturation of those projects even before we get to feed and certainly before we get to FID so that we're spending phased capital in a prudent way, progressing the projects that have the best chance of going forward and parking the others so that we don't burn too much development spend while we're getting those ready to go. And that Dorado is one example, but.
Yeah, that's a really good point. You can spend a lot of money in feed studies and keeping everything warm and trying to have all the balls in the air at the same time, trying to take everything forward at the same time, even if you're competing for capital when it comes to making those FID decisions.
What we're trying to do is bring a discipline at the organization where we really get that roadmap and that funnel laid out in front of us, and we're not working on everything at the same time. Some things will just have to go on the shelf, and their day will come. We're not panicking. We don't have to develop everything tomorrow, but we will develop our best opportunities within the new capital allocation framework.
If we bring it back to a slide you presented at the half year, around a 15%-20% free cash flow outlook, which included growth CapEx in those numbers, are they still the right numbers for us to think about? You haven't slowed growth because that's quite a compelling return if you're paying 60%-100% of it back to shareholders.
The same free cash flow from operations assumptions would apply.
So I'll have to go back and check for this new cap because since we're putting a cap on the CapEx, but there wouldn't have been too many of those projects coming online in that timeframe anyway, if you think about it. It was really Barossa and Pikka are driving those cash flows.
1 5 in the half-year pack. It included growth CapEx in those numbers, so.
Yeah, yeah, but what I'm saying, it would have included growth CapEx, and I would suggest that that growth CapEx might be less than it would have been in that chart. We can confirm that for you, the actual numbers, but I would suggest, given that we're going to put a ceiling on growth CapEx, it would be less.
Okay. Thank you.
Less growth CapEx, just to be sure.
No misinterpretations.
We refer to it more as development CapEx as opposed to growth because it's not always growth. And I think the other thing to think about, as opposed to thinking we're chasing production at every asset, we're chasing on that overall portfolio picture. So it's about backfilling that production hopper as opposed to backfilling every asset at the same time. Next.
Thanks, Kevin, and the board. Out of time. Tom Allen from UBS. Something you could share some color, perhaps, Sherry, just on your appetite under the new capital framework for buybacks versus base dividends and under what scenarios you might preference buybacks versus base dividends. And then also just a refresh on how you're thinking about the hurdle rates for some of those key growth opportunities that you're looking at.
Can you repeat that second part of the question?
Second part was just a refresh on the hurdle rates for some of your key growth opportunities.
Okay. All right. So on the first question, it's always something, and I've mentioned it in the slide, so just to reiterate, it's already built into our framework, even under today's allocation methodology, that we'll always look in each period at whether or not a dividend and/or a share buyback is the best outcome. So that's not going to change over the cycle. There's many things that feed into that in terms of how the market is developing, how our share price is evolving, etc. So that's unchanged. And we understand that there are some of you that love to have a buyback. Others prefer dividends. So that's always something on balance that we'll take into account.
In terms of, if I understand your question on the hurdle rate, we don't disclose the specific methodology or hurdle rates that we apply for each project other than to say we try to make sure they're very, very competitive over time, both on an absolute basis versus each other, and also at very conservative commodity prices. And that will link into comparing those back to the alternative of a shareholder return, either in the form of a share buyback or a dividend.
And Alan, I mean, you might want to talk about when it comes to hurdle rates, are yours any different from Brett's?
No.
No.
No. I've mentioned that briefly in my presentation. We're very proud of the returns that Moomba CCS phase I is generating, and it has carbon price upside as well. So we can find projects.
We'll be selective about what we do, and we'll be patient.
I think that's, in Alan's area particularly, really honed down the number of things that they're working on in that group and driven a lot of focus that we all should be working on if we're going to succeed, right? I mean, we're not going to build CCS projects that don't work commercially. That's not a - we're not going to shrink our way to success, so to speak. They've got to work commercially, and we've got a good commercial model now. We've engaged with customers, or potential customers, I should say, who are engaging on that basis. We're very confident we can build good return CCS projects in the future. Alan is competing with Brett, with Vince Santostefano in the west, with Bruce in Alaska for those funds in the future.
Hi, team.
James Byrne from Citi. So I wanted to pick up on what Dale was asking just around the capital allocation.
I was looking for you there, James. I couldn't find you. Sorry.
Right at the front. Yeah. So look, there was a slide with group production, and you get to that peak in 2026, and then it's like a 3% per annum decline. So that's good. That's not very capital hungry, in my opinion. You get to March 2026, I think it is, you've paid off PNG LNG project finance, so you get a big step up in free cash flow to equity, which helps gearing. So I can certainly see why you're prepared to go and pay 60% minimum of your free cash flow all in to investors.
But if you actually step back and look at oil and gas companies and the ones that have delivered the best TSR over the decades, it's the ones that focus on cash return on capital invested. Actually feel like maybe things are a bit backwards in this capital allocation framework where you've actually prioritized the shareholder returns as opposed to CROCI. And I get the point that you don't want to go invest in mega projects consistently, right, and never really have that free cash flow or volume for volume's sake, right? Maybe I'm a bit greedy. I want valuable volume, not a choice between value and volume. So my question is, do you not feel that you've constrained the capacity of the business to have a higher CROCI?
And secondly, I guess it'd be helpful to maybe go a bit deeper on how you're actually approaching that annual budget for that capital ceiling. What are the key determinants that you're looking at?
Yep. Well, I think.
CROCI. That's a good one. I like that. CROCI. Anyway, Sherry.
No, I think you've, in a way, answered the question because that was exactly the deliberation we had.
And I think the context that we really can't underline enough is that, indeed, if you don't have a very healthy funnel of low-cost and phase-able options in the portfolio, you do end up being in this trade-off situation where either you can have a very strong shareholder return today, and you can go off a production cliff in the next x number of years, which could be a very short time interval, or you go into a major growth cycle with some reward far out into the future. And the work that we've done over the last 10 years to build up a portfolio where we've got, as you've said, a very stable production base already banked as soon as Barossa and Pikka come on stream, and we've got a nice collection of geographically diverse mix between short-cycle and long-cycle investments.
In just about all cases, really based on brownfield expansion or backfill, gives us that luxury of choice to be able to not constrain valuable growth both in the next five years but also for decades to come, but also over that cycle to offer a very attractive return. It's really that delicate balance that not a lot of portfolios are able to provide, but because of that healthy funnel and the base we have today, we can strike that balance.
I think if you think about our. By the way, it's not saying we're not going to invest. We are going to reinvest. Maybe just not at as many projects simultaneously because we don't have to. We don't have to do that to maintain production. If you think about what we've got going on today, we've got more projects than just Pikka and Barossa.
You had the Angore project. That's a $1.2 billion development. We had our Halyard infill well , what was going on in the West offshore program in the West. We've got the KMT FPSO project or FSO project in PNG. And there's a number of other maybe medium-sized projects in the portfolio and execution right now today that's soaking up CapEx. And so it's really just about saying, once we get over that sort of next phase out of this growth, got the two big projects, which give us a much more balanced portfolio in terms of free cash flow contributions coming out of Alaska, coming from Darwin, from Barossa, as well as PNG. Because PNG and GLNG is kind of paying for everything right now, right? And I always said I did not want to have a single asset company. We don't have a single asset company.
But right now, we've got a couple of assets that are carrying a lot of the weight. From next year, we've got four assets, much more evenly distributed contribution to the portfolio. And that's where we want to be. Because in 2018, when the earthquake hit in PNG, all of Oil Search's revenue stopped the day the earthquake shut it down. Our PNG asset went offline, but four others were contributing positive cash flow at that point in time. And so you've got it from a risk point of view. You don't want to be too heavily weighted to one project, to one asset. So how we will invest in the future, all of those things will be considerations.
Something to consider, James, which I think goes to the heart of your question, is three of those assets in terms of, well, certainly two today, GLNG and Cooper Basin, if you think of them for the East Coast, are short-cycle sustainable CapEx assets. It's a drilling program every year. And so they're much more predictable, and they're much more manageable within the capital allocation framework. It's really sustaining CapEx you're spending there. Once Alaska comes online, it's not quite the same, but it's not a million miles different. It's about one drilling rig drilling every year and drilling another 15-20 wells a year, going out of phase I and into phase II. There's a little bit of infrastructure you've got to build for that expansion when we go down that path in the future, but that's a few years off.
If we are successful in developing the Beetaloo, then whether it's backfill and upfill, I guess is the term I'd use for GLNG and/or expansion gas for DLNG, that is another short-cycle CapEx asset which really lends itself to this model. You're left with any major growth in Alaska, and WA is the assets that really are more that what I'd call long-cycle boom-bust type of asset in the portfolio. The rest fits to that short-cycle, more sustainable CapEx operating model.
Thanks. On the remark around stable production that you've already got baked in, if we think about that PNG chart, in fact, whoever's in control of the slides may be helpful to bring up. I think it was slide 47, 47, PNG chart. It basically shows production from existing 2P reserves, and then there's a gray section above, which is the undeveloped program.
Unsanctioned, yeah.
Correct. And part of the bee in the bonnet that I've had around the segment in PNG is that I fear that there's very high production that's forecast within the consensus estimates, but not necessarily the CapEx that's required to keep it full. And if I look at when that gray actually starts in 2028, right, and starts to get wider and wider, I fear that the equity market's forgotten about the CapEx required to get that. So two specific questions. Does that 2028 include the APF tie-in in the blue, which is 2P reserves, or in the gray? And then secondly, how do you think that we, as an equity market, should think about the CapEx intensity of what you've got there in the gray?
So yeah, so APF, because we actually—you could say it was sanctioned at PNG LNG sanctioned as part of the unitization, but ultimately we haven't made the commitment on the expenditure yet, so it does fit in the gray. And again, it's a choice for us to decide when, along with the other joint ventures. And then really, the projects that we have baked in there, it's an upside and a backfill chart, so we have.
Describe what APF has because it's not a major upstream development, is it?
No, no.
So look, it's one or two wells in a 30-kilometer pipeline. Ultimately, we are looking at whether we can do a low CapEx version of that and put some of the CapEx in a little bit later and start off with lower production upfront, but that's just a work in progress.
But ultimately, the base case that's baked into here is a 250 million scf a day connection with a 30-kilometer pipeline. So it's a pretty simple low risk to evacuate a field that we've been producing for the last 25 years, albeit producing the oil and reinjecting the gas back into Agogo. So very little subsurface risk, and it's really an operational execution. So that's baked into the gray, so it's not included in the 2P in the blue because we actually haven't got any ability to exploit that right now with no pipeline built. And then ultimately, the projects that I showed you of Papua and P'nyang, baked sequentially into that gray.
Just to add to that for absolute clarity, because I had mentioned in the indicative profiles that we put out that show us within that 100-120 million barrel range, we put the low CapEx APF alternative in that just to show how that really is a subset of sustaining, if you like, in terms of the type of spend that is versus the major project development. So that's a larger opportunity to structure.
And sorry, Sherry, what I was trying to allude to when I was talking about Papua was we actually get significant value not through production in Papua, but actually through tolling and access agreements, which you don't fully see in this. So you only see a small increase in production, whereas 17% or 17.7% post-government back in. So from a cost point of view, we're only 17.7% of that exposure.
And ultimately, I'll let Sherry talk to it, but there would be a strategy on project finance for that as well.
Yeah.
Thanks, James. Mark Wiseman from Macquarie. Thanks for the update today. Just two questions. Firstly, on the capital ceiling, could you help us understand how that formula's going to work? You talked about stress testing at lower oil prices. Would there be enough room for Papua LNG to move forward? Because that's one that's less in your control in terms of timing. Can you pursue Papua if that takes FID and other projects, or would it really just be Papua for that period?
Sherry. Yep. Thank you, Kevin. Welcome to Santos. So Papua is an example.
Obviously, when we've thought through and thought through very hard, how can we make sure that when the model spits out the back end, that this is an upgrade in terms of how we look at dividends versus a back end? That would be one of the scenarios that we would look at is Papua moving forward. Clearly, subject to the recycle of the project and how the economics come out, that would be one big one. It wouldn't leave room for another Papua at the same time. I don't think anyone would run a model that would tell you that, but that's just one example. And the framework will apply if Papua is moving ahead, if it's moving ahead as backfill, if any other scenarios are running through. And so we've modeled to all of those scenarios, as you say, at a conservative commodity price.
But that's also why we don't tell you what the ceiling is now, because there's lots of work that's needed still that will happen over the next year before we come into 2026, both on that project with our joint venture partners, but also across the entire portfolio to select and progress which projects and how they fit into that ceiling. One thing I can say, and Kevin and I are very clear on this, there's a little footnote in one of the slides that says the capital ceiling is subject to board approval. And you might say, "Well, what's the point of that? They approve the budget every year." But the fact is that we won't dare go in that room and ask for a capital ceiling that spits out a dividend that's not at least as competitive, if not more competitive, than it is today.
So that puts what we think are very, very healthy, transparent belts and braces on us as a management team and how we work together with each of the project proponents to progress those projects so that what goes forward to the board after all that work is something that fits that model.
Yeah, it's great to see that discipline. Just my second question on GLNG. When the CSG contract expires, I think the market's been a little uncertain as to what the future would be for one of those GLNG trains. That production chart that you showed, including the Beetaloo, is huge. Could you maybe just unpack how are you thinking about that decision, whether to close a GLNG train versus the economics of developing your Queensland and Northern Territory resources?
Brett, do you want to talk to that?
Yeah.
Well, look, I mean, what I tried to show today was that the opportunity set that we have that would actually be able to continue to not just to backfill our six million tons, but as Kevin said, upfill. So there's capacity there, and the cheapest LNG liquefaction capacity anywhere is in Darwin in a plant that's already running. So I think that's the upside for us. So I would certainly like to see us have the opportunity to try and fill that train before we talked about turning it off. And I think you can see not just from our longer-term Beetaloo aspirations, but even in the shorter term, our five fields have the ability to take a lot and carry that through. So ultimately, we're going to have discussions about where capital is spent.
But to me, we've got a very real scenario where we continue to put the same amount of gas we're putting through today, if not more.
I mean, I think the story of GLNG has been one is there's been a lot of lost opportunity because we didn't have enough gas to fill those contracts. That's a fact of life, right? And we weren't able to exploit those contracts to the full. How we created value from the starting point in 2016 was cost out. So we couldn't create magic gas that wasn't there. But what we could do was get the cost of producing that gas down, the cost of the wells to drill in the upstream. And we did a lot of work in GLNG over the years to do that.
We've made it a good project at six million tons per annum, but we know we've got a capacity of we could run that at 8.4 million tons per annum. That's a lot of lost opportunity. We've been working for a number of years as to how can we fill up GLNG? There's no easy solutions to that. There's a lot of gas in Queensland, but it's tough, right? It's tough. More coal seam gas to the north, tight gas to the Bowen Basin. They're all tough prospects to develop, and you can spend a lot of capital chasing that.
We've drilled a few wells up there testing those things, but the one play that we've tested, and we need to do more appraisal of that gives us a potential to do that and be the breakthrough play that can fill this long term is the Beetaloo. The Beetaloo has the potential. We've done the extended well testing to Tanumbirini 2, I think it was, and we've seen some of the results from some of the other players in the basin. We believe we're in the sweet spot. We've got a very, very good address there in the Beetaloo and the McArthur Basin, and so over the next few years, we want to test that. We want to prove that up. The development of it would be quite simple. It's a pretty low CO2, low processing requirements for that gas.
It's really wells in a pipeline to wherever you're going to take the gas. So very simple development, not cheap, but simple. And we think it's got the best potential to fill that and give us the ability to scale up beyond that if we wanted to. So what that means, what's the focus on that in the next two or three years? We've changed the way we engineer projects. Our industry used to design them, get contractors in, engineer them to death, have a design, spend a lot of money, sometimes hundreds of millions of dollars designing it, then go get your approvals. And we've seen how that sort of worked out for us elsewhere in the last couple of years. So we've turned that process on its head now.
The next two or three years, just as we're doing in Narrabri today, the majority of our effort will be spent on getting approvals, pipeline easements, the things we need to develop the Beetaloo as opposed to doing all the engineering ahead of the game, right? So we'll get all the approvals. We'll get what we need to get in place so that when we do start spending hard cash, we know we can build it at the end of it. Next, please.
Gordon Ramsay, RBC Capital Markets. Kevin, I don't think it's fair that I ask Sherry this question because she's so new. Last year at this time, you were talking about return on average capital employed by 2028 of 15%-20%. Your parameters were a $75-$90 Brent oil price and a $12-$14 JKM price. Does that still hold?
Look, I think for the projects, for the project assumptions, we made them at those price assumptions. I would say yes, that still holds. If anything, most of the projects, most of the projects we've worked on have got better over time in terms of the IRRs on those projects. So provided we don't blow that elsewhere, Gordon, I'd say yes, that would hold. Those assumptions sound robust.
Okay. And my second question, BW Offshore has talked about a $100-$150 million increase in terms of the FPSO costs. Is that cost solely payable by them, or does that come back to Santos?
That's their contractual issue. And we're very aware of the challenges that they've had in the shipyard, but we have a lump sum contract for the construction and a lease-operated arrangement for the next 20 years or 15 years, whatever it is, for that asset.
And so that is their contract, not ours.
Thank you.
But I do want to say that our working relationship with BW Offshore is very positive. It's a very strong relationship. We don't want them suffering. And I think it's probably gone a little bit beyond them just losing their margin on it now. They're probably a little bit in the red on that one. That's unfortunate. But contractually, there's no kind of follow-through for us there.
Yeah. Good morning, Rob Koh from Morgan Stanley right here, Mr. Gallagher. Thanks very much for the pleasure today.
Only my distant relatives call me that.
So I guess actually,
they don't. They call me much worse, to be honest.
Oh, dear. Go for it. I wouldn't go there.
So congratulations to the whole team on the commissioning of the Moomba CCS facility, particularly because I think this time last year, Kevin, you made a joke that you wouldn't be here if it wasn't up and running, which no one would have held you to. I apologize. I wouldn't have. Can you maybe give us some color on the learnings from the process? Because it wasn't a straight line, as all development projects aren't. And also, you've talked about how you'll take some of those learnings to the Bayu-Undan CCS. So if you could maybe just give us some color on that.
Yeah. Well, first of all, I just want to make the point. On nine out of 10 metrics, Moomba CCS was a roaring success. On one, it was not. And that was cost. We spent more than we said we were to deliver on it.
I'm partly responsible for that. So I just want to put that out there. I said to the guys, under no circumstances does this startup and shut down and startup and shut down. I want a flawless startup. Brett and I discussed this at the big turn of the year, and we said, "So throw every resource we have at this because we do not want that." We know how that would be used against us in terms of the arguments that CCS doesn't work and all that sort of stuff. So we had to get it right first time. That cost us a bit of money. There were some other inflationary impacts and everything else. When you have a low CapEx project, when it blows out by $10 million, it's suddenly a big percentage on a low CapEx project. So there's that.
But we did take a very conscious decision that we weren't going to press the go button till every rock had been turned, every I dotted and every T crossed. And that cost a bit of money at the end. And so that was just a tactical decision that cost us money. And so that took the breakeven from that $24 that we would have said lifecycle breakeven $24 at FID to $28 at completion. And so that's a $4 increase in the NPV 10 breakeven. We thought that was a price worth paying. We thought, in the interest of our shareholders, that was a price worth paying. Now, I'd turn to Sean and say, "Sean, what does the Moomba CCS project mean for you in the marketplace?
What does it mean for you when you talk to LNG customers and stuff?"
It's incredibly important from a long-term contracting perspective. In fact, I've joked with Brett and Alan that we could probably augment the difference between the four and the eight by selling tickets for customers to come and visit Moomba because it's probably the most interesting asset we have in the portfolio from a buyers' perspective. So I touched on before, we're looking at an abated product, an abated LNG, and the center of that opportunity is really Moomba CCS. And they can see that we've delivered that and that we can move from that.
Yeah. No, thank you. It's always important. So one of the lessons was how important this project was globally to a lot of stakeholders, a lot of eyes on this project.
And I guess we probably got a lot of activists to thank for that, right, for throwing so many rocks and making it such a high-profile project. But ultimately, what that meant, a lot of eyes. So it had to be right first time. I think the other thing is that Alan mentioned the regulatory environment and how important getting that right first before you start these projects actually is and getting the support of the regulator. An d Alan, what are the lessons that you're taking to Bayu-Undan CCS from Moomba CCS?
Yeah. So really think about it in three buckets. There's the engineering, which maybe Brett can talk about. There's the regulatory, and then there's the commercial. So on the regulatory side, you've got to get out ahead of it.
With the South Australian government and the federal government at the time, both being supportive of Moomba CCS when we took FID, two huge ticks. So we are working very, very hard now to get exactly the same in place for Bayu-Undan. And that involves a whole heap of stakeholders, all of which we're engaged with and making progress on. It is very, very closely linked to the commercial model, though, because everyone's looking at the available dollars. And what has worked well on Moomba CCS is a toll plus carbon price upside. And that is the model that we are looking at for all of our projects as well. So we've got learnings from how that comes together and what economics need to work for both sides.
Brett, do you want to add anything?
Yeah.
Look, I mean, I think it's just an example of the best culturally what we do really well. I saw the best side of Santos during the commissioning. We really needed to get behind it. And I didn't see a group or a department or a function or whatever that didn't give us what we needed to make it successful. And everybody, we've got incredible depth in the organization, the folks that actually came down that commissioned compressors like this on an annual basis out of CSG, our best guys. We made them available for Moomba. Steve's process safety team, Rebecca's subsurface team, it just highlighted and showcased the absolute depth in the organization when we need to solve something and get it running perfectly because perfection was success here. Something that worked 95%, Neil and I spoke about it, 95%'s a failure. It has to be 100%.
And the way it was, and this is a new thing to do, right? You could, in the end, say, "We're running compression and dehydration and pipelines and wells," which we're very good at doing, but we're running a supercritical fluid like CO2 through it. We're running it through. It has its own hazards. The way that was all done, and we didn't turn a dial on that until everything was to the satisfaction, not just from the team, but independently verified. Like I say, it's probably an example of the best of Santos in one snapshot.
And without going into details, also, we've recently just done our annualized staff perceptions and engagement surveys. And we've got record results.
I think in terms of the levels of engagement in the organization, I mean, really up there, right across the entire company, real improvements overseas just a couple of years ago. I think a big part of that is coming out of COVID. People were very concerned about having to come back to the office, probably, was one of them, but very concerned about what the future looked like, I think, generally speaking. You'd see that in other parts of your lives as well. Very concerned what the future for our industry was. All the talk was about shutting it down, decarbonization, replacing it with something new, even though we didn't quite know what that new thing was yet. I think it's been really good for the morale of our organization to see this project come online and be successful.
And so don't underestimate the commitment of our people to decarbonizing our operations as we go forward. And I do believe you saw the stats. I think Sean talked about what the IEA themselves are saying the energy mix will be in the future and how much abated gas will make up of that LNG and that gas mix in the future. And I think abated gas is going to be a big part of that energy mix. Now, look, I'm very aware that we've overshot the time. I apologize. My time management skills are legendary poor. So I apologize for that. So we're going to wrap up at that. And I think there's lunch being served outside. So please, if you didn't get an opportunity to ask a question, apologies for that. But very happy to take any questions outside over lunch. Thank you again.
I'm going to ask you, a very intimidating-looking bunch. You really are. Very intimidating-looking bunch. Can you give the presenters a round of applause, please? Thank you. Thanks very much.