Santos and Beach Energy Moomba carbon storage project running at full capacity

Santos and Beach Energy have exceeded initial expectations at their Moomba carbon storage facility, a move that should placate frustrated shareholders.

Santos and Beach Energy are injecting captured carbon dioxide into depleted reservoirs at the Cooper Basin at a rate that has them on course to meet their targeted 1.7 million tonnes per annum, a development that should placate frustrated shareholders and beat down criticism of the technology.

Santos and Beach are under intense pressure from shareholders to deliver growth projects that will bolster revenues and increase share prices, and the revelation that Moomba is online and storing at full capacity rates will be prized by investors.

Beach – the joint partner of the Moomba facility – said first CO2 injection occurred on September 30 and daily injection has reached capacity rates, exceeding expectations for the commissioning phase.

By injecting the captured CO2, the joint partners will be able to abate all of the gas from the Moomba Gas Plant that would have otherwise been released. By storing it underground, Beach and Santos will earn carbon credits, which both can then use to meet their own emission reduction targets or sell into the open market. Whichever option, the commencement of Moomba will be lucrative for both companies.

Santos chief executive Kevin Gallagher.

Beach Energy’s chief executive Brett Woods said removing 1.7m tonnes accounts for 11 per cent of South Australia’s emissions and it will have sizeable financial benefits for the company.

“This is a single project making a material impact on emissions and that is very, very impressive,” Mr Woods told The Australian.

“This particular project also generates returns similar to other oil and gas opportunities in the Cooper Basin.”

Shares in both companies rose on the news.

But by hitting full capacity, Santos and Beach will hope they can prove the viability of expanding Moomba to store additional gas from other emitters.

The reputation of carbon capture and storage has been badly damaged by the underperformance of Chevron’s own facility on Gorgon, though the US company insists it is making progress in improving the injection rates.

Santos chief executive Kevin Gallagher said the completion of work at Moomba has busted the myth that carbon capture and storage does not work.

“The successful start-up of Moomba CCS phase one is a potential game changer not only for Santos, but for hard-to-abate industries across Australia. With a lifecycle cost under $US30 per tonne of CO2, CCS can no longer be ignored. This is a real carbon management industry opportunity for Australia, generating real jobs that are high-skilled, long-term and well-paying in South Australia,” Mr Gallagher said.

Originally published as Santos and Beach Energy Moomba carbon storage project running at full capacity