Santos partners with Tokyo Gas for carbon-neutral e-methane in Australia

Australian energy giant Santos has teamed up with Japan’s largest gas utility company Tokyo Gas to explore opportunities for the production of carbon-neutral e-methane in Australia.

Santos, through its new energy business Santos Energy Solutions, agreed with Tokyo Gas to evaluate the potential to produce e-methane for export to Japan, leveraging extensive existing infrastructure.

The first production of e-methane is targeted for 2030.

The partners will conduct a study including technical analysis of renewable power, CO2, and other feedstock sources, the methanation process (to make e-methane), cost and schedule evaluations, risk assessments, and commercialization options.

The study will focus on the Cooper Basin which has vast renewable resource potential for making green hydrogen using electrolysis technology, where Santos is trialing DAC technology. Santos is also building one of the world’s largest carbon capture and storage (CCS) projects at Moomba in the Cooper Basin and the project is on track for its first injection in 2024.

Santos Energy Solutions Executive Vice President Alan Stuart-Grant said the company values its long-standing relationship with Tokyo Gas, including as a joint venture partner and customer in the Bayu-Undan and Darwin LNG projects.

“Santos is committed to delivering affordable, reliable, lower-carbon energy for our customers in Australia and Asia. E-methane has the potential to be an important carbon-neutral fuel – a direct substitute for natural gas – that avoids the cost associated with new infrastructure and new industrial processes, which for many sectors are not yet technically feasible, affordable or available.

“When I visit Japan and Korea, e-methane is the product our customers and investors are talking about and there is potential for others to join this collaboration as it progresses. We are excited about this new business opportunity which could transform our Cooper Basin assets into a large-scale, commercial carbon capture and storage, and low-carbon fuels hub,” Grant concluded.

In other company-related news, Santos and UAE’s energy giant Abu Dhabi National Oil Company (ADNOC) joined forces to pursue a pathway towards the potential development of a joint global carbon management platform in a bid to support the decarbonization journey throughout Asia-Pacific and accelerate net zero goals.