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Moomba to be in production by 2024

Image shows smoke stacks at sunset

Photo by Reuters

2nd November 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Oil and gas major Santos and its joint venture (JV) partner Beach Energy have taken a final investment decision (FID) on the $165-million Moomba carbon capture and storage (CCS) project, in South Australia.

Start-up of the project is expected in 2024 and the project will reduce emissions from gas production at Moomba by 70%, permanently and safely storing 1.7-million tonnes of carbon dioxide (CO2) underground each year. 

Santos has successfully registered the Moomba CCS project with the Clean Energy Regulator, with the CCS method providing a crediting period of 25 years, over which time the project will qualify for Australian Carbon Credit Units for emissions reduction from Moomba CCS.

Santos MD and CEO Kevin Gallagher welcomed the Regulator’s registration of this globally significant project.

“This carbon reduction project in the South Australian outback will be one of the biggest and lowest cost in the world and will safely and permanently store 1.7-million tonnes of carbon dioxide per year in the same reservoirs that held oil and gas in place for tens of millions of years,” Gallagher said.

“We forecast a full lifecycle cost of less than $24/t of CO2 including cash costs in operation of $6/t to $8/t of CO2, with first injection targeted for 2024.

“This decision is a critical step in decarbonising natural gas on our path to new low-emissions and clean-burning fuels such as hydrogen.

“It is also an important milestone in our plan for Santos to achieve net-zero Scope 1 and 2 emissions by 2040.”

Beach Energy MD and CEO Matt Kay said the Moomba CCS project would deliver a step change in Beach’s CO2 emissions profile.

“For more than 50 years, natural gas-filled reservoirs in the Cooper basin have played an important role in delivering Australia’s energy needs, so in many ways it is fitting some of these same reservoirs will play a role in reducing Australia’s emissions.” Kay said.

“Once operational, this project will deliver a material reduction to Beach’s emissions and forms a key pillar of our aspiration to reach net-zero emissions by 2050.

“Natural gas will continue to be a critical source of energy, even in a lower carbon future, and we are committed to playing our part in reducing our emissions footprint – our participation in the Moomba CCS project is a clear indication of that.”

Federal Minister for Industry, Energy and Emissions Reduction Angus Taylor said a financial commitment to building and operating the nation’s first CCS hub was a major milestone for the technology in Australia.

“This investment has been enabled by the Emissions Reduction Fund (ERF), which can now recognise and credit emissions reductions achieved by large-scale carbon capture and storage projects,” Taylor said. 

“This is the first time a national government will award tradable, high-integrity carbon credits to large-scale projects that capture and permanently store carbon underground.”

The ERF has already delivered more than 100-million tonnes of abatement, and this will increase rapidly over the next decade.

Under the ERF, projects can sell carbon credits to the government or on the fast-growing voluntary private market, which grew 42% between 2019/20 and 2020/21. This growth shows no signs of slowing down, with Australian voluntary demand expected to comfortably exceed one-million tonnes in 2021/22. 

The International Energy Agency’s Sustainable Development Scenario requires a hundredfold increase in CCS between now and 2050 to achieve the world’s climate goals, going from 40-million tonnes of CO2 stored each year today to 5.6-billion tonnes in just 30 years time.

“If we do not decarbonise the hydrocarbon fuels that still make up just over 80% of global primary energy and provide 60% of the world’s clothing fibres along with other essential everyday products, then the world will simply not reach net zero by 2050,” Gallagher said.

“2050 is only 30 years away and over the last 30 years since the first climate change conference in 1992, the world’s consumption of hydrocarbon fuels has increased in absolute terms and decreased by only 4% in terms of primary energy share. Santos is already receiving significant international interest in our CCS and hydrogen plans.

“Just as Australian liquefied natural gas is valued in Asian markets without their own energy resources, carbon storage is now valued because many other countries lack the geological storage or land required for nature-based offsets.

“Australia has a comparative advantage in carbon storage and the Australian government’s focus on CCS and other low-emission technologies is setting the nation up to capitalise on our natural assets and become a carbon storage superpower, building on the position we have established as an energy superpower over more than half a century.

“Santos is playing a leading role in driving the energy transition, including our 1.7-million tonnes per year Moomba CCS project and our proposed plan to use the Bayu-Undan facilities in Timor-Leste to safely and permanently store up to 10-million tonnes of CO2 per year once gas production ceases,” Gallagher said.

Edited by Creamer Media Reporter

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