KALGOORLIE (miningweekly.com) – Oil and gas major Santos and the joint venture (JV) partners at the Bayu-Undan project have signed a memorandum of understanding (MoU) with Timor-Leste’s national oil company, TIMOR GAP, to explore partnership opportunities for the proposed Bayu-Undan carbon capture and storage (CCS) project offshore Timor-Leste.

The MoU follows four non-binding MoUs for carbon dioxide (CO₂) supply to Bayu-Undan CCS that indicate demand for CO₂ storage at Bayu-Undan CCS could be more than 10-million tonnes a year.

The MoU with TIMOR GAP includes sharing information about Bayu-Undan CCS and exploring potential partnership opportunities, including equity participation for TIMOR GAP in the Bayu-Undan CCS project.

Santos MD and CEO Kevin Gallagher said Bayu-Undan CCS is well positioned to provide future carbon management services to the Asia Pacific region.

“This could be an exciting new industry for Timor-Leste, putting it at the leading edge of the global energy evolution and generating revenue, local jobs and business opportunities for the nation,” Gallagher said.

“Santos and our JV partners are delighted to be working with TIMOR GAP on partnership opportunities to advance Bayu-Undan CCS as a carbon storage hub for customers in Australia, Japan, Korea and across Asia as those countries seek to decarbonise their economies.

“This MoU is yet another agreement highlighting the strong interest in CCS and its broad acceptance as a safe, proven technology that is absolutely critical to achieving the world’s climate goals.

“We look forward to working with TIMOR GAP and the Timor-Leste and Australian governments to progress the necessary commercial, fiscal and legislative arrangements to support the development of the Bayu-Undan CCS project.”

The Bayu-Undan CCS project is part of Santos’ three-hub CCS strategy that includes the Moomba CCS project, now 70% complete and on track to store up to 1.7-million tonnes of CO₂ a year starting in 2024.

Bayu-Undan CCS ex-Darwin will provide a cost-competitive carbon solution because of its large scale and ability to utilise existing pipelines and other infrastructure.

In addition, the storage reservoirs are well understood, have previously held gas and condensate in place for tens of millions of years, and will provide safe and permanent CO₂ storage, Santos told shareholders.

Santos has a 43.4% operated interest in Bayu-Undan. The remaining interest is held by SK E&S, INPEX, Eni and Tokyo Timor Sea Resources.