Australian oil and gas major Santos (OTCMKTS: SSLZY), in collaboration with Japan’s JX Nippon Oil & Gas Exploration Corporation (JX) and ENEOS, is set to accelerate advancements in carbon capture and storage (CCS) following the Australian parliament’s approval of legislation facilitating cross-border transfer of carbon dioxide (CO2).
The trio has inked a memorandum of understanding (MOU) for a joint feasibility study evaluating the capture, transport, and sequestration of emissions from Japan to support the expansion of the Moomba CCS project.
The Moomba CCS project in South Australia, spearheaded by Santos, aims to transform the Cooper Basin into a hub for decarbonization and low-carbon fuels.
The MOU with JX and ENEOS outlines ambitious targets, including the potential importation of up to 5 million tons of CO2 by 2030, 10 million tons by 2035, and 20 million tons by 2040, Santos said in a statement earlier this week.
The transported CO2 would feed into the Moomba CCS project, aiding its second phase and serving as a crucial resource for future e-methane production.
The collaboration aligns with Santos’ Energy Solutions low-carbon fuels initiatives, dovetailing with ongoing studies alongside Tokyo Gas (OTCMKTS: TKGSY) and Osaka Gas for potential low-carbon e-methane production in the Cooper Basin.
The envisaged circular economy involves exporting e-methane produced by combining green hydrogen with CO2 sourced from industrial emissions or direct air capture.
The first phase of the Moomba CCS project is nearing completion, with a targeted first injection in 2024.
Notably, the project is aiming for a competitive lifecycle breakeven storage cost of approximately $24 per ton, making it one of the world’s lowest-cost CCS initiatives.
The broader implications extend to South Australia’s pivotal role in supporting Japan’s decarbonization efforts, as the collaboration seeks to address commercial and investment opportunities in the transport of substantial CO2 volumes.
This MOU builds upon recent agreements with APA (NASDAQ: APA) and ADNOC, underlining Santos’ commitment to establishing a comprehensive network of CO2 pipelines and infrastructure essential for fostering a robust CCS industry in Australia, with ripple effects reaching regional economies.