One of Australia’s leading independent oil and gas companies Santos Energy has made the final decision to invest $165 million in the Moomba carbon capture and storage (CCS) project in South Australia.
The investment is a joint venture with other local oil industry giant Beach Energy. And the CCS project has already been successfully registered with the Clean Energy Regulator.
In turn, the Clean Energy Regulator provides a 25-year crediting period for CCS projects, which means that the Moomba CCS project will qualify for the Australian Carbon Credit Units for the duration of that period.
The project is recognized as ‘globally significant’ due to its size and low running costs. In fact, Santos Managing Director and Chief Executive Officer Kevin Gallagher described it as one of the largest in the world and noted that, once complete, the Moomba carbon capture and storage project will have a total storage capacity of 1.7 million tonnes of CO2 per year.
Furthermore, for storage purposes, it will be using the same reservoirs that had previously stored oil and gas for millions of years.
And early estimates say that the full life cycle cost will come down to under $24 per tonne of carbon dioxide. The price tag also covers the $6-8 cash costs in operation per tonne of CO2.
Moomba is expected to become operational in 2024.
The investment decision is thought of as a ‘critical step in decarbonizing natural gas’ and paving the way for new low-emission and ‘clean’ fuels, such as hydrogen. In addition, it’s also a milestone in Santos’ strategy to achieve net-zero emissions by 2040.
The project is also in alignment with the International Energy Agency’s (IEA’s) Sustainable Development Scenario, according to which the world must see a hundredfold increase in CCS by 2050 in order to meet global climate goals.
It is widely agreed upon that without CCS, reaching those goals would prove nearly impossible.