Santos has taken a significant step forward in its pursuit of carbon capture and storage (CCS) initiatives following the passage of legislation in the Australian parliament to facilitate the cross-border transfer of CO2. The company has now entered into a collaborative agreement with two major Japanese energy companies, JX Nippon Oil & Gas Exploration Corporation (JX) and ENEOS Corporation (ENEOS), to bolster its Moomba carbon capture and storage project and transform the Cooper Basin into a hub for decarbonization and low-carbon fuels.

The memorandum of understanding (MOU) signed between Santos, JX, and ENEOS marks the beginning of a joint feasibility study aimed at evaluating the potential for capturing, transporting, and sequestering emissions from Japan. This collaborative effort is aligned with Santos' plans to expand the Moomba CCS project and supports the company's ambitions for low-carbon fuels within its Energy Solutions initiative. The project's scope extends to exploring the feasibility of potential low-carbon e-methane production in the Cooper Basin, with the intent of exporting e-methane in a circular economy.

The MOU outlines the collaborative efforts to identify and define commercial and investment opportunities, particularly focusing on the potential importation of up to 5 million tonnes per annum (Mtpa) of CO2 by 2030, 10 Mtpa by 2035, and 20 Mtpa by 2040 from Japan to the Moomba CCS project. The importation could occur through either Port Bonython in South Australia or Gladstone in Queensland. This collaboration positions South Australia and Santos at the forefront of assisting Japan in its efforts to decarbonize its economy.

Santos' CEO and Managing Director, Kevin Gallagher, emphasized the ambitious targets set for the study with JX and ENEOS, highlighting the transformative potential of Moomba as a decarbonization and low-carbon fuels hub. The ongoing first phase of the Moomba CCS project, currently 75% complete, is on track for its first injection in 2024. Notably, the project is targeting an impressive $24 per tonne lifecycle breakeven storage cost, positioning it as one of the lowest-cost CCS projects globally.

Upon completion, the Moomba CCS project will have the capacity to store up to 1.7 MT of CO2 annually. This substantial capability equates to an annual emissions reduction exceeding 25% of the total achieved in Australia's electricity sector over the past year to March 2023.

Santos' strategic position in the Cooper Basin, characterized by extensive land holdings, abundant renewable energy resources, a robust regulatory framework, depleted oil and gas reservoirs, and existing infrastructure, provides a competitive advantage for pursuing this transformative opportunity. CCS technology, a proven method for emissions reduction, holds promise for addressing emissions from critical fuels like LNG and challenging sectors such as steel, aluminum, and cement.

The MOU with JX and ENEOS builds on recent agreements with APA and ADNOC, marking Santos' efforts to establish a network of CO2 pipelines and related infrastructure to support the growth of a new carbon capture and storage industry in Australia. This industry has the potential to not only decarbonize the domestic economy but also contribute to regional emissions reduction.