Start-up of giant gas development remains on track as flagship carbon capture and storage project propels forward Australia’s journey to net zero

Australian energy player Santos has hit the 82% completion mark at its project in Commonwealth waters, bringing it closer to the first gas from its huge field off the coast of Australia. The firm also confirmed the commissioning of a carbon capture and storage (CCS) project in the Cooper Basin, which is said to be one of the world’s largest and lowest-cost CCS projects.

Santos made the final investment decision (FID) for the Barossa gas project in 2021, kick-starting a $600 million investment in the Darwin LNG life extension and pipeline tie-in projects, encompassing activities related to a floating production storage and offloading (FPSO) unit, known as Opal, subsea production wells, supporting subsea infrastructure, and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline to extend the facility life for around 20 years.

The Australian energy giant has confirmed that the project is over 82% complete and remains on track for production in the third quarter of 2025. Multiple companies are working to bring this project to life, including BW Offshore, which got the contract for the construction, connection, and operation of the FPSO for the Barossa field in March 2021 and hired Dyna-Mac in May to build the topside modules.

Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, commented: “I am very pleased with the progress of the Barossa gas project. The FPSO is in the pre-commissioning yard in Singapore, the fourth well is underway and other activities are on track for offshore commissioning to commence in the first half of 2025.”

Upon deployment, the 4.6 billion fixed 15-year FPSO contract, with additional ten-year extension options, will enable BW Offshore to take care of natural gas production at the Australian field. Santos confirmed in August 2024 that the Gas Export Pipeline (GEP) to deliver gas from the field to Darwin LNG was complete while construction activities for the Darwin Pipeline Duplication were underway.

“Our focus for the remainder of 2024 is on project execution and cost discipline – managing costs, delivering on our promises, pursuing excellent results. With the Moomba CCS project already running to full capacity, excellent progress at Barossa and the Alaskan winter season ahead of us, Santos is in a great position to deliver superior shareholder returns over the coming years,” Gallagher said.

The Moomba CCS project completed commissioning and is now online, storing CO2 in the Cooper Basin depleted reservoirs at full rate, with the technology and reservoir performance said to be aligned with expectations. The Australian energy player expects to inject approximately 250,000 tonnes (gross) of CO2 in 2024, with the project already at full injection rates.

Gallagher emphasized: “The successful start-up of Moomba CCS phase one is a potential game changer not only for Santos, but for hard-to-abate industries across Australia. With a lifecycle cost under US$30 per tonne of CO2, CCS can no longer be ignored. This is a real carbon management industry opportunity for Australia, generating real jobs that are high-skilled, long-term and well-paying in South Australia.

“Australia’s Clean Energy Regulator and South Australia’s Department for Energy and Mining are world-class regulators implementing international standards, thereby giving confidence in the integrity of measurement, monitoring, verification and carbon credit generation.“

Following the first CO2 injection on September 30, 2024, one of the partners in the South Australian CCS project, Beach Energy, highlights that daily injection has reached capacity rates, exceeding expectations for the commissioning phase and indicating the project’s potential to capture and store approximately 1.7 million tonnes of CO2 per annum.

“There is strong customer interest in our Moomba CCS project and Santos has recently signed a series of MOUs with domestic and international third parties to evaluate the potential to capture, transport and sequester their emissions at Moomba. This provides strong momentum for Moomba CCS phase two as a commercial service,” Gallagher noted.

The Moomba CCS project, adjacent to the Moomba Gas Plant in the Cooper Basin, comprises a four-stage compressor, five injection wells, CO2 dehydration, and CO2 pipelines. The depleted underground reservoirs in the Strzelecki and Marabooka fields are envisioned to store vented reservoir CO2 from the Moomba Gas Plant. Brett Woods, Beach Energy’s Managing Director and Chief Executive Officer described the commissioning of Moomba CCS as a pivotal moment in Australia’s emissions reduction journey.

“It is widely accepted that natural gas will play a critical role in the energy transition and that CCS is a necessary enabler for low emissions energy supply. The International Energy Agency has stated that it will be near impossible to reach net zero by 2050 without CCS. Thanks to Beach’s significant investment in Moomba CCS, we are now well on track to reach our targeted net Scope 1 and 2 emissions intensity reduction of 35% by 2030,” Woods underlined.

As Santos is actively seeking to lower its carbon footprint with CCS, the Australian giant and its joint venture partners inked a memorandum of understanding (MoU) in August 2023 with Timor-Leste’s TIMOR GAP to explore partnership opportunities for a proposed CCS project at a gas and condensate field in the Timor Sea.

Additionally, Santos and SK E&S are pooling resources on cross-border CCS solutions, aiming to position Australia at the top of the list of countries working to assist Asia in lowering its carbon footprint.