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JERA, Tokyo Gas, Inpex to join Santos-led Bayu Undan CCS project

© Supplied by ShutterstockInpex is one of three Japanese energy companies exploring CCS options offshore East Timor
Inpex is one of three Japanese energy companies exploring CCS options offshore East Timor

Japan’s three energy companies – JERA, Tokyo Gas and Inpex – plan to join the proposed giant carbon capture and storage (CCS) project led by Santos (ASX:STO), at Bayu Undan offshore East Timor. The trio’s total investment could reach as much as 100 billion yen ($748 million) reported the Nikkei Asia.

The three Japanese energy companies plan to store carbon dioxide (CO2) emitted during the production of liquefied natural gas (LNG) at projects in northern Australia and they also hope to eventually transport CO2 from Japan by ship. Japanese companies, including JERA, Mitsubishi Heavy Industries, as well as Mitsui O.S.K. Lines, are considering developing dedicated ships to transport liquid CO2.

JERA and Tokyo Gas will calculate the cost of transporting emissions from their own power plants and LNG terminals to assess whether the Bayu Undan CCS project will be commercial. The cost to process 1 tonne of CO2 at the proposed Bayu Undan CCS hub is around 8,000 ($59.3) to 10,000 ($74) yen, according to the Nikkei, a business publication.

JERA, the largest power generation company in Japan, and the world’s biggest buyer of LNG, is a partner in the Santos-led Barossa gas development offshore northern Australia that will backfill the Darwin LNG export plant. Given the high CO2 content at the Barossa field, Santos plans to capture the carbon and send it to the depleted Bayu Undan field offshore East Timor for storage. This is driving momentum behind the CCS hub.

Tokyo Gas and Inpex are partners in the Santos-operated Darwin LNG terminal.

Earlier this year, Japan’s Inpex (TYO:1605) confirmed it aimed to lead an effort to build a CCS facility near Darwin, Australia, as it strives to decarbonise its business. It was proposing its own CCS hub to store emissions from its Ichthys LNG development in northern Australia. However, it might prove more economic for Inpex to join Santos’ CCS project, which is designed to handle 10 million tonnes of CO2 per year and is more advanced than Inpex’s own proposal.

Australia’s second largest oil and gas producer, Santos, plans to take a final investment decision on the CCS hub offshore East Timor, also known as Timor Leste, in 2023. Analysts expect the CCS facility to cost over $1.7 billion.

Santos eyes cheaper carbon storage offshore East Timor at new $1.7bn APAC hub

East Timor hopes to host the first merchant CCS scheme of its kind in Asia Pacific. Indeed, it could be one of the world’s largest. The ultimate vision is a multi-user infrastructure hub for receiving and storing carbon dioxide from multiple sources and industries across the region.

“Given that the wells and the facilities are already in place, Bayu-Undan CCS could be a low-cost, large-scale, commercial CCS project that could store CO2 from regional projects, including any future Timor Leste developments,” Santos said on Tuesday

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