Australia’s Santos and compatriot Beach Energy have decided to invest $165 million in the Moomba carbon capture and storage (CCS) project in South Australia.
The LNG producer announced the final investment decision on the project on Monday.
Santos also registered the CCS project with the Clean Energy Regulator following a recent move by the Australian government.
The regulator’s CCS method provides a crediting period of 25 years, over which period the project will qualify for Australian Carbon Credit Units for emissions reduction from Moomba CCS, Santos said.
The Moomba CCS project will permanently store 1.7 million tonnes of carbon dioxide (CO2) per year. Also, it will have a capacity for up to 20 million tonnes annually across the Cooper Basin.
Santos claims it would be one of the biggest CCS projects in the world.
“We forecast a full lifecycle cost of less than $24 per tonne of CO2 including cash costs in operation of $6-8 per tonne of CO2, with first injection targeted for 2024,” Santos chief executive Kevin Gallagher, said.
He said this decision “is a critical step” in decarbonizing natural gas on the company’s 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,” he said.
Gallagher said that “Santos is already receiving significant international interest in our CCS and hydrogen plans.”
“Just as Australian LNG 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,” he said.
Santos operates the CCS project and has a 66.7 percent interest while Beach Energy holds the rest.