Managing director Kevin Gallagher said the reservoir had the potential to bury up to 10 million tonnes of carbon dioxide a year. “We believe the Bayu-Undan reservoir and facilities have the potential to be a world-leading CCS project,” Mr Gallagher said.
The Bayu-Undan deal comes as Santos closes in on a final decision on a further-progressed CCS project at South Australia’s Moomba gas plant,which could have the capacity to bury 20 million tonnes a year.
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CCS – which traps carbon dioxide emissions produced by factories or power plants before they are emitted into the atmosphere and buries them underground – has been a divisive area of climate policy in Australia. Critics say CCS is not economically proven and could prolong the life of fossil fuel assets.
The world’s biggest CCS project,Chevron’s Gorgon venture in Western Australia,this year failed to meet a crucial target of capturing and burying an average of 80 per cent of the carbon dioxide produced from its gas reservoirs,fuelling even further scepticism about the technology’s prospects of successfully functioning at scale.
Supporters of CCS technology,including oil and gas producers and the Morrison government,argue it is a necessary and unavoidable component of the world’s decarbonisation goals to avoid the worst and most immediate impacts of global warming.
Mr Gallagher pointed to forecasting from the International Energy Agency (IEA) suggesting it would be “virtually impossible” for the world to achieve the Paris Agreement’s 2050 climate targets without CCS because the transition to renewable energy would not cut emissions in time.