The head of Timor-Leste’s national oil company has underlined the importance of carbon sequestration as a potential new revenue stream for the impoverished nation after the company signed an accord with Santos to examine partnership opportunities in carbon capture and storage.

The deal between Santos and Timor Gap, to be announced by Santos on Monday, comes amid an escalation of debate around legislation in Australia that would allow for the cross-border storage of CO2 waste. Teal MP for Mackellar Sophie Scamps last week described the bill as “an excuse to keep mining fossil fuels”.