Santos and BP have entered into a non-binding agreement which could lead to BP investing $20m to support Santo’s Moomba carbon capture and storage (CCS) project in Australia.

The project aims to capture 1.7m tonnes of carbon dioxide (CO2) currently separated from natural gas at the Moomba gas processing plant each year. 

That CO2 will then be reinjected into the same geological formations which have safely and permanently held oil and gas in place for tens of millions of years.

“We welcome this agreement with BP that brings the Moomba CCS project closer to fruition,” said Kevin Gallagher, Managing Director and CEO of Santos.

“We estimate the cost of this abatement at less than $30 per tonnes and our aim to drive these costs lower with scale and experience.”

“Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen.” 

“Santos’ Moomba CCS project is an important first step.”

“With the Cooper Basin’s reinjection capacity assessed at up to 20 million tonnes of carbon dioxide per year for 50 years, it has the potential to be a large-scale carbon sink for power generators and other industries in eastern and southern Australia.”

According to Gallagher, today CCS projects worldwide store approximately 40 million tonnes per year of COwhich is short of the more than two billion tonnes the International Energy Agency says we need to store annually by 2040 to reach global climate goals.

The non-binding agreement is subject to finalisation of terms and a final investment decision targets for the end of 2020.

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