Oil and gas giant Santos will proceed with a $220 million carbon capture and storage project in South Australia's north, in a move hailed as a major milestone in Australia's push towards net zero emissions by 2050.
Santos and joint venture partner Beach Energy say the Moomba plan has been successfully registered with the Clean Energy Regulator allowing it to qualify for carbon credits over a 25-year period.
Santos Chief Executive Kevin Gallagher described the project as globally significant.
"This carbon reduction project in the South Australian outback will be one of the biggest and lowest cost in the world and will safely and permanently store 1.7 million tonnes of carbon dioxide per year in the same reservoirs that held oil and gas in place for tens of millions of years," Mr Gallagher said.
"This decision is a critical step in decarbonising natural gas on our path to new low-emissions and clean-burning fuels such as hydrogen.
"Moomba CCS is the first project to hit the go button, with more to come."
Federal Energy Minister Angus Taylor said the project was the first to be registered under the government's Emissions Reduction Fund and was a major step forward for the technology in Australia.
"This is the first time a national government will award tradable, high-integrity carbon credits to large-scale projects that capture and permanently store carbon underground," Mr Taylor said.
SA Energy Minister Dan van Holst Pellekaan said the storage hub would create 230 jobs during construction and sustain more during its operation.
"Santos' commitment to transition to clean fuels is critical for the South Australian economy," he said.
"We want to be a world-class producer of clean fuels such as hydrogen to help power our economy and export to the world.
"This infrastructure will become even more valuable over time, allowing South Australia to take carbon dioxide from many sources and store it underground."
Santos said the full lifecycle cost of the carbon storage was forecast to be less than $US24 per tonne with the first injection of CO2 targeted for 2024.
The carbon to be stored represents about seven per cent of SA's emissions and will cut emissions from gas production at Moomba by 70 per cent.
Australian Associated Press
