Santos says it could help Australia meet its carbon reduction goals by pumping CO2 underground
A piece of the CO2 emissions solution could be literally under our feet, but Santos says incentives or policies to help are needed.
SA Business
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Santos could be injecting carbon dioxide into reservoirs in the Cooper Basin by 2022 if the numbers stack up and there are “the right policy settings and incentives’’.
The Adelaide oil and gas company, while releasing a 7 per cent rise in annual net profit of $US674 million ($A1.0 billion) for the year ended December 31, said it had decided to push forward with designing a carbon capture and storage (CCS) operation.
The company has been considering such a project for a number of years, but has made it clear that without a carbon price or another policy setting or incentive to progress, it was unlikely to be viable.
In its Climate Report released today, the company said it would complete the design phase of the project, which would be sited at Moomba in SA’s extreme Far North, this year.
“Activities assessing injectivity are now planned for the coming year, Santos said.
“Initially we plan to capture around 300,000 tonnes of CO2 emissions per annum from the Moomba Gas Plant.
“The CO2 would be compressed, dehydrated, and transported to a target field nearby for injection.’’
The company said it would be in a position to make a final investment decision this year “subject to the required government policy being in place’’.
“With the right policy settings and incentives to accelerate CCS deployment, the Cooper basin could become a large scale, commercial CCS hub capturing emissions not only from oil and gas, but from other industries such as power generation.
“The Cooper Basin could play an important role to help Australia meet its Paris emission reduction targets.’’
Santos said it had also converted 22 oil wells to run on solar and battery solutions, and would convert a further 34 this year.
“There are over 200 existing pumps across the Cooper Basin that could be covered and ultimately Santos aims to use solar power as the standard energy source for new onshore wells.’’
In its financial reporting today, Santos said its profit increase was down to a jump in production, which helped offset weaker gas and oil prices across the year.
Revenue from ordinary activities climbed 10 per cent to $US4.03 billion.
Underlying profit fell 1.0 per cent to $US719 million for the year ended December 31, from $US727 million a year ago.
Santos declared a final dividend of US5c per share, below last year’s payout of US6.2c.
The company said it is making steady progress on a number of projects.
“Following completion of the ConocoPhillips’ acquisition, we expect to take a final investment decision on the Barossa project to backfill Darwin LNG in the second quarter,” chief executive Kevin Gallagher said.
“The Barossa and DLNG (Darwin LNG) partners are in advanced discussions to finalise the processing agreement for Barossa gas to support a final investment decision.” Santos’ aim is for the Barossa gas field to feed the Darwin LNG plant. There is a roughly 18-month gap between when the Bayu-Undan gas field that feeds the Darwin plant is set to run dry in 2022 and when Barossa is due to start producing.
However, Santos has been looking for ways to extend the life of Bayu-Undan. Santos is also targeting a preliminary engineering design entry decision for its Dorado project, the biggest Australian oil find in more than two decades, in the second quarter.