Santos, BP Team up for Oz Carbon Capture Project

Santos has entered a non-binding agreement with BP that could lead to the UK major investing A$20mn (US$13.2mn) in the Australian producer's Moomba carbon capture and storage (CCS) project in South Australia.

The deal, announced by Santos on March 4, will need its terms finalised. A final investment decision on the project is targeted for the end of 2020, Santos said, adding that front end engineering design work had begun.

The aim is to capture the 1.7mn metric tons/year of carbon dioxide currently released at the Moomba gas processing plant and then re-inject it into underground reservoirs.

"Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen,” Santos CEO Kevin Gallagher said. "Santos' Moomba CCS project is an important first step.”

Cooper Basin's re-injection capacity, assessed at up to 20mn mt/yr of carbon dioxide for 50 years, has the potential to be a large-scale carbon sink for power generators and other industries in eastern and southern Australia, Gallagher said.

The preliminary deal between Santos and BP comes under the latter's Good Standing Agreement with authorities in relation to the cessation of its exploration work programme in Commonwealth waters in the Great Australian Bight, adjacent to South Australia.