Santos pens MoUs for CO2 supply to underpin Bayu-Undan CCS project
SUMMARY
The four non-binding MoUs have been executed with potential upstream gas and LNG projects offshore the Northern Territory and in Darwin, and an energy and industrial conglomerate in Korea.
By Shardul SharmaSantos has signed four memoranda of understanding (MoU) for the proposed storage of CO2 emissions from third parties to underpin the initial development of the Bayu-Undan carbon capture and storage (CCS) project, where front-end engineering design work is nearing completion, it said on May 3.
The four non-binding MoUs have been executed with potential upstream gas and LNG projects offshore the Northern Territory and in Darwin, and an energy and industrial conglomerate in Korea.
The MoUs indicate demand for CO2 storage at Bayu-Undan CCS could be in excess of 10mn metric tons/year, Santos said. Bayu-Undan CCS ex-Darwin will be a relatively low-cost carbon solution, with costs expected to be well within the Australian Government's proposed price cap on Australian Carbon Credit Units, the company added.
Bayu-Undan CCS has the potential to reduce the absolute emissions and emissions intensity of Australian gas and LNG projects, as well as of other industries in the Northern Territory, by providing safe and permanent CO2 storage in depleted gas reservoirs that previously held gas and condensate.
The project also provides a potential Scope 3 emissions solution for Australia's exports to Asia, with large customers in countries such as Korea looking to capture energy and industrial emissions and ship CO2 to Australia for safe, permanent sequestration deep underground, Santos said.
Santos CEO Kevin Gallagher said Timor-Leste is also well-positioned as a future provider of carbon management services. Santos is working with both the Timor-Leste and Australian governments to bring the Bayu-Undan CCS project to fruition and realise its potential as an important regional decarbonisation project benefiting both nations and our regional trade and investment partners, he said.
"Increased deployment of CCS is critical to achieving the world's climate goals and executing these MoUs demonstrates the strong underlying demand for CCS and the broad acceptance of CCS as a decarbonisation strategy," Gallagher said.
The Bayu-Undan CCS project is situated within Santos' Darwin and Bayu-Undan Hub, part of its three hub CCS strategy that includes the Moomba CCS project which is under construction and 60% complete. The first injection at Moomba CCS is scheduled for 2024.
Santos has awarded Worley a services contract to support the Bayu-Undan CCS project in the Timor Sea. Under the contract, Worley will provide front-end engineering and design (Feed) services for the Bayu-Undan offshore facilities and pipeline. This includes the re-purposing of the Bayu-Undan facility and the offshore section of the gas export pipeline from hydrocarbons to carbon dioxide service.
Worley will also provide Feed services for the life extension of the Bayu-Undan facility and pipeline to enable continued safe and reliable operation.
