Adelaide-based Santos Ltd., operator of Bayu-Undan gas production in the Timor Sea, has entered the front-end engineering and design (FEED) phase of its proposed carbon capture and storage (CCS) project for the field. The company says the project has potential to store up to 10 million tonnes/year of carbon dioxide, equivalent to about 1.5% of Australia’s carbon emissions each year.
The FEED work includes engineering and design for additional carbon dioxide processing capacity at the Darwin LNG plant as well as repurposing the offshore Bayu-Undan field for carbon sequestration once it’s depleted and gas production ceases. A final investment decision for Bayu-Undan CCS is targeted for 2023.
Bayu-Undan field is in East Timor waters and Santos said it is working closely with that country’s National Petroleum and Minerals Authority towards the necessary agreements and regulatory framework for the CCS project. The project will also require agreements from the governments of both East Timor and Australia as well as some Australian regulatory arrangements.
The CCS project will have the potential to accept carbon dioxide from nearby Australian gas projects (including Santos’ Barossa gas development) and other industries in the Northern Territory and hence could be the beginning of a new carbon services industry for East Timor, Santos managing director and chief executive officer Kevin Gallagher said.
A meeting in May of the East Timor and Australian Prime Ministers included a commitment by Australia to establish an LNG partnership fund to strengthen links between the two countries in gas development and trade, including the use of CCS.
Entry into FEED has the support of Santos’ five Bayu-Undan JV partners headquartered in Japan, Korea, and Italy.
Santos has a 43.4% operating interest in Bayu-Undan and Darwin LNG. SK E&S Co. Ltd. has 25%, Inpex Corp. 11.4%, ENI SPA 11%, JERA Co. Inc. 6.1% and Tokyo Gas Co. Ltd. 3.1%.
