Santos and East Timor sign pact for potential $1.6bn CCS scheme at Bayu Undan

Santos and East Timor sign pact for potential $1.6bn CCS scheme at Bayu Undan

Australia’s Santos today announced that it has signed a memorandum of understanding (MoU) with East Timor’s regulator ANPM to progress a carbon capture and storage (CCS) project, estimated to cost $1.6 billion, at the ageing Bayu Undan field in the Timor Sea. But low returns and high complexity threaten the viability of the proposed scheme.

“The MoU details the areas the Bayu-Undan Joint Venture and the ANPM, with the support of the Timor-Leste Government, will work on collaboratively to test the viability of repurposing the existing Bayu-Undan facilities and using the Bayu-Undan reservoir for CCS. These include sharing technical, operational and commercial information, assessing the regulatory framework, evaluating local capacity opportunities and establishing a decision timeline,” Santos said in a statement today.

Significantly, Santos needs to offset carbon emissions from its Barossa project, which was recently sanctioned. The offshore Barossa gas field development off Australia’s Northern Territory has the unfriendly tag of having more carbon dioxide than any gas currently made into liquefied natural gas (LNG), according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA).