Santos has embarked on a Memorandum of Understanding (MOU) with JX Nippon Oil & Gas Exploration Corporation (JX) and ENEOS Corporation (ENEOS) to conduct a joint feasibility study on capturing, transporting, and sequestering emissions from Japan.
The Australian parliament has recently passed legislation enabling cross-border transfer of CO2, and Santos has taken swift action to capitalise on this opportunity. It has announced the alliance with two major Japanese energy companies to collaborate on carbon capture and storage (CCS) technology so that the partnership can expand the Moomba CCS project and transform the Cooper Basin into a hub for decarbonisation and low-carbon fuels.
Reason for collaboration
This cooperation would support the expansion of the Moomba CCS project and enable the export of e-methane, made by combining green hydrogen with CO2 obtained from industrial emissions or direct air capture in a circular economy.
How Japan will benefit from this move
The MOU seeks to identify and define commercial and investment opportunities covering the potential importation of up to 5 million tonnes per year (Mtpa) of CO2 by 2030, 10 Mtpa by 2035, and 20 Mtpa by 2040 from Japan to the Moomba CCS project, via either Port Bonython in South Australia or Gladstone in Queensland. This would provide a significant source of CO2 to support Phase 2 of the Moomba CCS project and provide feedstock for future e-methane production. This would also position South Australia and Santos at the forefront of efforts to help Japan decarbonise its economy.
Observation of the CEO
Santos CEO and Managing Director Kevin Gallagher stated that the targets set for the study with JX and ENEOS demonstrate the enormous potential of Moomba as a decarbonisation and low-carbon fuels hub and as an exciting new industry for South Australia.
Overview of the Moomba CCS project
The Moomba CCS project's first phase is 75% complete, with the first injection on track for 2024. Moomba CCS is targeting about $24 per tonne lifecycle breakeven storage costs, which would make it one of the lowest-cost CCS projects globally. The project will uphold the capacity to store almost 1.7 million tonnes of CO2 each year, which is equivalent to more than 25% of the total emissions reduction achieved in Australia's electricity sector over the past year to March 2023.
Future gains in industrial operations
Santos' position in the Cooper Basin, with its vast land tracts, world-class renewable energy resources, robust regulatory framework, depleted oil and gas reservoirs, and existing infrastructure, provides a competitive advantage in pursuing this opportunity. CCS technology is a proven method for reducing emissions in critical fuels such as LNG and hard-to-abate sectors such as steel, aluminium, and cement.
Why is this good for the Asian industrial belt?
This is excellent news for Asian customers who still rely on LNG as a critical energy input to their economies and will continue to do so for decades. This MOU builds on and complements recent MOUs with APA and ADNOC as Santos envisions weaving a network of CO2 pipelines and other infrastructure supporting a new carbon capture and storage industry in Australia that could decarbonise the region's domestic economy and neighbouring commodity markets.
If you wish to learn more about sustainable developments in the entire aluminium value chain, please spare a glance at AL Circle's specially formulated report, Sustainability in the Global Aluminium Industry.
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