Santos underpins its Bayu-Undan CCS project with four CO2 supply deals

Australian energy company Santos has signed four memoranda of understanding (MoU) for the proposed storage of CO2 emissions from third parties for its Bayu-Undan carbon capture and storage (CCS) project.

According to Santos, the four non-binding MoUs for CO2 supply were signed with potential upstream gas and LNG projects offshore the Northern Territory and in Darwin, and an energy and industrial conglomerate in Korea.

With these deals, the company underpins the initial development of the project that is nearing completion of its front-end engineering design (FEED) work.

The MoUs are said to indicate that demand for CO2 storage at Bayu-Undan CCS could be in excess of 10 million tonnes per annum (mtpa).

Parties to the newly-signed MoUs will now work cooperatively toward securing binding commitments, including one party looking for the opportunity for international CO2 transfer and carbon management services.

Bayu-Undan CCS ex-Darwin will be a relatively low-cost carbon solution, with costs expected to be well within the Australian Government’s proposed price cap on Australian Carbon Credit Units, Santos explained.

Bayu-Undan CCS has the potential to reduce the absolute emissions and emissions intensity of Australian gas and LNG projects, as well as of other industries in the Northern Territory, by providing safe and permanent CO2 storage in depleted gas reservoirs that previously held gas and condensate in place for tens of millions of years.

The project provides a potential Scope 3 emissions solution for Australia’s exports to Asia, with large customers in countries such as Korea looking to capture the energy and industrial emissions and ship CO2 to Australia for safe, permanent sequestration deep underground.

While the Bayu-Undan CCS project is located offshore Timor-Leste, Darwin is set to be an important regional hub for CO2 capture, transfer and storage to Bayu-Undan as well as to other potential CCS locations offshore the Northern Territory, which are still in the exploration and feasibility stages.

Santos’ Managing Director and CEO Kevin Gallagher said Timor-Leste is also well-positioned as a future provider of carbon management services.

“Santos working with both the Timor-Leste and Australian Governments to bring the Bayu-Undan CCS project to fruition and realise its potential as an important regional decarbonisation project benefiting both nations and our regional trade and investment partners“, Gallagher noted.

The Bayu-Undan CCS project is situated within Santos’ Darwin and Bayu-Undan Hub, part of Santos’ three-hub CCS strategy that includes the Moomba CCS project which is under construction and 60% complete. The first injection at Moomba CCS is scheduled for 2024.

A final investment decision for Bayu-Undan CCS is targeted for 2025.