Australian energy companies Santos and Beach Energy are to proceed with the Moomba carbon capture and storage (CCS) project in South Australia following a final investment decision (FID).

Registered with the Clean Energy Regulator, the $165m project will qualify for Australian Carbon Credit Units over its crediting period of 25 years, allowing for emissions reduction.

Stating the project is set to be one of the ‘biggest and lowest cost in the world’, Kevin Gallagher, CEO, Managing Director, Santos, said, “It will safely and permanently store 1.7m tonnes of carbon dioxide (CO2) per year in the same reservoirs that held oil and gas in place for tens of millions of years.”

With first injection set for 2024, Gallagher forecasts a full lifecycle cost of less than $24 per tonne of CO2 including cash costs in operation of $6-8 per tonne of CO2.

Santos regards the project as being a milestone in its plan to achieve net zero Scope 1 and 2 emissions by 2040, following the International Energy Agency (IEA)’s Sustainable Development Scenario announcement that CCS needs to be increased a hundredfold between now and 2050.

Matt Kay, Managing Director, CEO, Beach Energy, said that the Moomba project would deliver a step change in the company’s CO2 emissions profile.

“Once operational, this project will deliver a material reduction to Beach’s emissions and form a key pillar of our aspiration to reach net zero emissions by 2050,” he added.