Santos, Beach secure $15m federal grant for carbon storage plan
A $210m carbon storage project in the state’s Far North is a step closer following a $15m funding boost from the federal government.
The state’s biggest company, Santos, is spearheading the Moomba carbon capture and storage
(CCS) project, which would initially inject 1.7m tonnes of carbon dioxide a year into depleted
reservoirs underground across the Cooper Basin.
Around 230 jobs would be created during construction, with thousands more sustained by the
proposed technology.
Federal Energy Minister Angus Taylor and Santos chief executive Kevin Gallagher visited Moomba on Tuesday to make the announcement.
The project was one of six carbon capture projects across the country to secure funding from the federal government’s $50m Carbon Capture Use and Storage (CCUS) Development Fund.
Other recipients included Mineral Carbonation International for its plans to use captured CO2 to produce construction materials, and Energy Developments, which is progressing plans to capture CO2 from landfill sites across the country.
Santos chief executive Kevin Gallagher said his company’s project would be one of the lowest cost carbon capture and storage projects in the world at $25 to $30 per tonne, and would eventually have the capacity to store up to 20 million tonnes of C02 a year.
“Australia has a natural competitive advantage in CCS with known high-quality, stable geological storage basins capable of injection at a rate of 300 million tonnes per year for at least 100 years – the same basins that have safely and permanently held oil & gas in place for tens of millions of years,” he said.
“Moomba and Port Bonython have provided reliable, affordable energy and employed thousands of South Australian workers for more than 50 years in skilled, secure, well-paying jobs. CCS and a new clean hydrogen industry could extend these jobs for the next 50 years and put South Australia at the centre of an emerging global zero-emissions clean fuels boom.”
The project is a key plank in Santos’ plan to make hydrogen from natural gas, and forms part of its ambition to become carbon neutral by 2040.
Before making a final investment decision, expected before the end of the year, Santos is negotiating with the federal Clean Energy Regulator for approval to receive carbon credits.
“We are technically ready, but an approved methodology for CCS projects to generate Australian carbon credit units through the emissions reduction fund is essential to make the project stack up economically,” Mr Gallagher said.
“With South Australia’s Port Bonython in the running to be a national hydrogen export hub, Santos is already attracting strong interest from Japanese and Korean customers and investors who are looking to Australia to help them reduce their emissions.”
Mr Taylor said overwhelming demand for funding through the CCUS Development Fund was further proof of the viability and importance of carbon capture technologies.
“We received funding applications to support $1.2bn of investment in carbon capture projects and technologies,” he said.
“The International Energy Agency and IPCC both regard carbon capture technologies as essential to achieve the goals of the Paris Agreement.”
An extra $263.7m in federal funding for CCUS projects, hubs and technologies was announced in last month’s budget.
The state government last month approved an environmental impact report for Santos’ CSS project after classifying it as having a “low impact”. That followed a successful 100-tonne trial late last year.
$50m Carbon Capture Use and Storage (CCUS) Development Fund Recipients
Santos Limited – up to $15m towards the low-cost capture and storage of CO2 emitted from Santos’s Moomba LNG operations.
Mineral Carbonation International – up to $14.6m towards the construction of a mobile demonstration plant that captures and uses CO2 to produce manufacturing and construction materials.
Energy Developments – up to $9m towards the capture and use of CO2 emitted from the production of biomethane at landfill sites for use in cement carbonation curing.
Carbon Transport and Storage Company – up to $5m to demonstrate the viability of carbon capture and storage from a coal-fired power station in Queensland and support the development of a geological storage basin in the Surat Basin.
Corporate Carbon Advisory – up to $4m towards Australia’s first demonstration of a direct-air-capture and storage project to geologically sequester CO2 in an existing injection well in Moomba.
Boral – up to $2.4m towards a pilot scale carbon capture and use project to improve the quality of recycled concrete, masonry and steel slag aggregates at New Berrima, NSW.
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