Under the MOU, Santos and SK E&S will partner on developing a low-carbon hub in Darwin, Northern Territory, following a 2022 CO2 storage permit for G-11-AP in the Bonaparte basin.
Additionally, the parties will collaborate on securing additional CO2 storage, including the Bayu-Undan field, and developing a transboundary business model for safe underground storage.
Santos CEO Kevin Gallagher highlighted the significant role of Carbon Capture and Storage (CCS) in decarbonising Asia’s energy-intensive economies through the MOU.
“Just as Australia has been a reliable energy producer for Asian economies for more than half a century, there is an enormous opportunity for Australia to be at the forefront of helping them decarbonise using our natural competitive advantage in carbon storage resources and knowhow,” Gallagher said.
He noted that the International Energy Agency‘s 2023 Net-zero update predicts a need for 6GTpa of CCS storage by 2050, which is 100 times higher than the current operational capacity, with the Agency highlighting Australia’s potential for large-scale deployment to support domestic CO2 abatement and regional emissions reductions.
According to him, Santos and SK E&S are collaborating with governments to expedite the development of regulatory, fiscal, and carbon credit frameworks for CO2 transport and storage, aiming to support international collaboration on carbon credit support for regional decarbonisation.
“We know a large scale-up of CCS is required to meet the world’s climate objectives and Santos has the technology, infrastructure and knowledge to be able to deliver low-cost CCS competitively on a global scale,” he stated.
Gallagher said the agreement comes on the heels of four previous MOUs signed with third parties for carbon capture and storage at Santos’ projected Darwin and Bayu-Undan CCS Hub, suggesting significant customer-led demand for CCS as a relatively low-cost decarbonisation solution.
“These MOUs complement a further MOU with Timor-Leste’s national oil company, TIMOR GAP, to explore partnership opportunities for the proposed Bayu-Undan CCS,” he explained. “CCS is a proven technology that is critical to achieving climate goals throughout the region and executing these MOUs demonstrates the increasing demand for CCS and the broad acceptance of CCS as a decarbonisation strategy.”
“Santos is making excellent progress on our planned three-hub CCS strategy with our Moomba CCS project on track for first injection in 2024, front end engineering and design at Bayu-Undan CCS nearing completion, and plans for Reindeer, offshore Western Australia, continuing to progress,” he added.
Santos Offshore Pty Ltd, Chevron Australia Pty Ltd, and SK E&S have been awarded the G-11-AP project, covering 26,239 km2 in the Bonaparte Basin.