Australian oil and gas major Santos (ASX: STO) said Monday it and its joint venture partners in the Bayu-Undan carbon capture and storage (CCS) project offshore Timor-Leste signed a Memorandum of Understanding (MoU) with TIMOR GAP, the Southeast Asian country’s national oil company, to jointly explore partnership opportunities.
The deal comes as Bayu-Undan CCS landed four non-binding MoUs for supply of carbon dioxide (CO2) showing that demand for CO2 storage at the facility could be more than 10 million tons per annum (Mtpa).
With a 43.4% interest, Santos is the operator of the project where it partners with South Korea’s SK E&S with a 25% stake, Japan’s INPEX (TYO: 1605) with 11.4%, Italy’s Eni (BIT: ENI) with 11%, and Tokyo Timor Sea Resources with 9.2%.
Under the MoU with TIMOR GAP, Santos and its partners will share information about Bayu-Undan CCS and explore potential partnership opportunities, including equity participation in the facility for the state-owned oil company.
“This could be an exciting new industry for Timor-Leste, putting it at the leading edge of the global energy evolution and generating revenue, local jobs and business opportunities for the nation,” Kevin Gallagher, Managing Director and CEO of Santos, commented on the MoU announcement.
According to the executive, this partnership would advance Bayu-Undan CCS as a carbon storage hub for customers in Australia, Japan, South Korea and across Asia as countries seek to decarbonize their economies.
Thanks to its large scale and access to existing pipelines and other infrastructure, Bayu-Undan CCS can provide a cost-competitive carbon solution, the Australian major said.
The project is part of Santos’ three-hub CCS strategy which also includes the Moomba CCS project is South Australia, which is 30% away from completion with a storage capacity of 1.7 Mtpa of CO2 from 2024 on.