BP deal boosts Santos’ CCS ambitions
Santos’ Moomba project will not suffer from the high abatement costs that are the largest obstacle to CCS adoption
Santos’ plans to develop one of the world’s largest and cheapest carbon capture and storage (CCS) sites were boosted on 4 March when BP provisionally agreed to invest in the Australian independent gas producer’s first venture into CCS.
The agreement commits the UK major to investing A$20mn ($13mn) in Santos’ CCS project at its Moomba plant in northern South Australia, subject to a successful FID by the end of 2020. The project, which took Feed last year and targets 1.7mn t/yr of CO2 capture, is located within the Cooper basin, a 130,000km² Permian-Triassic sedimentary basin that Santos says will eventually have a reinjection capacity of 20mn t/yr for 50 years.
Moomba would benefit from low abatement costs, estimated by Santos at A$30/t, and federal government incentives being finalised this year by Canberra to meet Paris Agreement goals. CCS projects currently have the capacity to store around 40mn t/yr globally, a small fraction of the more than 2bn t/yr the IEA forecasts will be needed by 2040.
If fully developed, the Cooper basin would rank alongside the world’s largest emerging CCS sites
“There is a race to secure low-cost storage sites worldwide, and that is why the Moomba CCS project is special,” says Prakash Sharma, Asia-Pacific head of markets and transitions at Wood Mackenzie. “Carbon removal systems using either CCS or direct air capture are gaining attention because these projects are crucial to achieving Australia’s environmental goals.”
The Australian government announced on 28 February that a new technology roadmap, scheduled for release this year, will prioritise investment in CCS over wind and solar. Energy minister Angus Taylor has also established a departmental working group, which will meet in April, to put a methodology in place for CCS to generate carbon credits.
“Just as private investment in renewable energy deployment was accelerated through public policy and funding over the last two decades, we now need to focus on accelerating CCS in similar ways to achieve the scale and experience that will drive costs down and deliver real scale when it comes to emissions reductions,” Santos CEO Kevin Gallagher tells Petroleum Economist.
Moomba will be the second-largest carbon storage project in Australia, behind the 3.5mn t/yr development at the Gorgon gas field at Barrow Island. The Chevron-led project came on stream last August and is the world’s largest dedicated geological CO2 storage facility.
$13mn BP commitment to Moomba CCS
If fully developed, the Cooper basin’s 20mn t/yr capacity would rank as the second-largest among several major commercial CCS sites set to emerge over the next decade, according to the Global CCS Institute. The Cooper project would be behind a 35mn t/yr Gulf of Mexico hub and ahead of a cluster straddling southwestern Nebraska and Kansas that could capture a combined 19mn t/yr.
“With the Cooper basin’s reinjection capacity, it has the potential to be a large-scale carbon sink for power generators and other industries in eastern and southern Australia,” says Gallagher.
A Global CCS Institute spokesperson told Petroleum Economist that the geology shows high confidence in the Cooper Basin's “significant potential” to be a large, permanent CO2 storage hub that could aid the development of a wider CCS industry in the country.
“The Cooper Basin holds multiple, stacked deep saline geologic formations sealed by large regional seals. In addition, the oil and reservoir properties of the Cooper Basin show the fields in the Basin are conducive to enhanced oil recovery using CO2, enabling offsetting of some costs from additional oil production,” says an institute spokesperson.
Source: Global CCS Institute