Carbon dioxide storage beckons as new industry

Australia has been warned that it risks missing out on opportunities for a new carbon dioxide storage industry unless it moves quickly to capture business interest.

The head of carbon capture and storage (CCS) research group CO2CRC, Dr Matthias Raab, says Asian countries have expressed interest in storing CO₂ in depleted gas reservoirs throughout Australia, but the approval process is complex.

“We have a very advanced resources industry with very high operational standards. For instance, the Australian oil and gas industry is among the safest in the world. Together with abundant deep storage reservoirs on- and offshore and greenhouse gas legislation, we have all the right ingredients to lead the world,” Raab says.

“But we also need to be aware of the international competition. Lately, Indonesia, Malaysia, Thailand, and Vietnam are moving faster than Australia.

“Obtaining project permits under the current legislation is a lengthy process. As we know, the processes can be challenged at court, and there are many failure points where unhappy stakeholders could put 2 years into the wringer of a big project. Every year that we’re not progressing releases millions of tonnes [of carbon] into the atmosphere.”

Legislation to permit Australian companies to import and export carbon dioxide passed through parliament at the end of 2023.

But Jeff Lynn, a partner of global law firm Ashurst, believes the Australian government has more work to do.

In a perspective written on the firm’s website, Lynn says new carbon permit scheme “paves the way for companies to participate in cross-border Carbon Capture, Utilisation and Storage (CCUS) transport and storage networks involving CO₂ import to or export from Australia.

“The federal government will first need to take further steps at the international level before the amendments take effect and companies can seek permits for cross-border CCUS projects.”

Raab says plans for CCS projects are in the pipeline in 6 areas, including gas fields in Gippsland, the northwest shelf, and Central Australia.

“These six projects can reduce 20% of Australia’s emissions and this is a significant opportunity for Australia,” Raab told Cosmos.

“Now we’ve projected this forward towards 2036 and we could capture up to 55m tonnes per year. There’s no other abatement method that we can see that will with such impact achieve genuine and long-term emission reduction. These projects will also pave the way for other carbon removal technologies, like Direct Air Capture (DAC).”

Santos says in a production update that the Moomba Carbon Capture and Storage (CCS) Project is 85% complete and commissioning activities have commenced with first injection expected around mid-2024. Flow testing on four injection wells has been successfully completed.

It is working with its Japanese partners on a proposal to: “jointly identify and define commercial and investment opportunities covering the potential importation of up to 5Mtpa of CO₂ by 2030, 10Mtpa by 2035 and 20Mtpa by 2040 from Japan to the Moomba CCS project, via either Port Bonython in South Australia or Gladstone in Queensland”.

“This would potentially provide a large-scale source of CO₂ to support Phase 2 of the Moomba CCS project and provide feedstock for future e-methane production. At the same time, this would put South Australia and Santos front and centre in helping Japan to decarbonise its economy.”

Santos Chief Executive Officer Kevin Gallagher says the targets set for the study with oil and gas partners JX and ENEOS “demonstrate the potential of Moomba as a decarbonisation and low-carbon fuels hub, and as an exciting new industry for South Australia”.

JX Oil and Gas exploration, a Japanese firm, was mentioned by Santos as a partner, however a look at its website shows it is already in talks with companies in the US and Malaysia for CCS projects.

ENEOS is likewise pursuing opportunities in multiple countries.

The Santos CCS project begins with plans to store 1.7mt a year at Moomba in the Cooper Basin.

Read More: Can Santos make carbon dioxide storage work?

The Climate Change Authority warned in December that Australia was not on track to meet its carbon emissions targets.

The 2023 report states Australia’s greenhouse gas emissions were 467m tonnes in the year ending June 2023, an increase of 4m tonnes.

“To achieve a 43% reduction in emissions by 2030 compared with 2005 levels, and net zero emissions by 2050, Australia will need to decarbonise at an average annual rate of 17 million tonnes,” the report says.

“Australia is not yet on track to meet its 2030 targets,” says Brad Archer, CEO of the Climate Change Authority.

Matthias Raab from CO2CRC says Australia’s low onshore storage costs, estimated by Santos to be less than $30 a tonne, make CCS globally competitive.

“We must move now to seize an economic opportunity for Australians and help the world curb carbon emissions.”