Australia's gas producers eye profits from carbon capture & More News Here

BRISBANE, May 18 (Reuters) – Australian oil and gas producers are eyeing future profits from carbon capture and storage (CCS) because the trade globally races to satisfy web zero emissions targets, even because the world’s largest CCS mission, in Australia, struggles to hit capability.

Chevron Corp’s (CVX.N) A$3 billion ($2 billion) facility linked to the Gorgon liquefied pure gas (LNG) off Western Australia has to date failed to satisfy its goal, nonetheless burying solely half as a lot carbon dioxide (CO2) as anticipated three years after its startup. learn extra

But international majors and independents on the Australian petroleum trade’s annual gathering this week stated CCS is the one confirmed expertise for decreasing emissions on the scale wanted, whereas sustaining dependable and reasonably priced provide.

As Chevron and its companions Exxon Mobil Corp (XOM.N) and Shell (SHEL.L) work to get Gorgon CCS as much as scale, others wish to the expertise as a chance to not simply offset their very own emissions, however to earn a living.

Santos Ltd (STO.AX) is investing $165 million creating Australia’s second main CCS mission, Moomba, utilizing depleted outback gas reservoirs to retailer 1.7 million tonnes a 12 months of CO2.

It additionally needs to show the Bayu-Undan oil and gas discipline within the Timor Sea right into a CCS hub, and has booked 100 million tonnes of carbon storage assets in South Australia.

“I think this is really exciting, because I believe that CO2 is about to become the fastest growing commodity in the world,” Santos Chief Executive Kevin Gallagher instructed the Australian Petroleum Production and Exploration Association (APPEA) convention.

The trade needs to retailer emissions from different industries in Australia and for LNG prospects in Japan and South Korea, the place there aren’t any carbon sequestration assets or huge tracts of land for nature-based carbon offsets.

Japan’s Inpex Corp (1605.T) is contemplating utilizing the proposed Bayu-Undan hub for CO2 from its Ichthys LNG plant in Darwin and probably creating its personal CCS mission in waters 270 km (170 miles) northwest of Darwin, Inpex vp Bill Townsend instructed Reuters.

“Not decarbonising is an existential threat to our industry,” he stated.

The International Energy Agency’s web zero state of affairs says 7.6 billion tonnes of carbon emissions would should be saved by 2050, or 200 instances greater than is being saved in 30 CCS tasks all over the world at this time.

“Just as our customers in Asia have looked to Australia for energy security over the last half century, they are now looking to us to help them reduce their emissions as they work towards net zero targets,” APPEA Chair Ian Davies stated.

Still, the expertise faces geological, regulatory and industrial boundaries, Wood Mackenzie analysts stated.

Understanding how a CO2 plume strikes via an aquifer or reservoir is crucial for every mission, requiring an enormous quantity of geological work, stated Wood Mackenzie analyst Angus Rodger.

The Australian authorities final 12 months allowed CCS tasks to generate Australian Carbon Credit Units, serving to to make tasks commercially viable.

But Rodger cautioned a world rush for brand new developments may backfire, as prices will rocket as firms compete for expertise and assets.

“All these projects are happening at the same time – they want to be up and running by 2030. That can’t happen,” he stated.

($1 = 1.4211 Australian {dollars})

Reporting by Sonali Paul; modifying by Richard Pullin

Our Standards: The Thomson Reuters Trust Principles.

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