A Woodside-led (ASX:WDS) joint venture that includes BP (LON:BP), Shell (LON:SHEL), Chevron (NYSE:CVX), as well as Japan’s Mitsubishi and Mitsui, have been awarded greenhouse gas (GHG) permit G-10-AP in the northern Carnarvon basin offshore Western Australia, as they pursue a potential CCS project.
The permit covers an area of 1775 square kilometres and holds the depleted Angel gas field. The JV has extensive existing data and knowledge of the field following decades of petroleum exploration and production, Woodside said in a statement today.
“The permit award represents an important milestone for the joint venture as it continues to assess the technical, regulatory, and commercial feasibility of capturing carbon emitted by multiple industries located near Karratha in Western Australia. The joint venture will now pursue evaluation and appraisal work to investigate the potential for the geological storage of carbon dioxide in the permit area,” noted Woodside.
“A multi-user carbon capture and storage (CCS) project near Karratha would be ideally located to aggregate emissions from various existing sources. It would also have the potential to facilitate the development of new lower-carbon industries, such as the production of hydrogen and ammonia, by providing a local solution for
emissions,” added the company.
The size of the CCS facility is subject to the completion of additional technical, regulatory, and commercial studies, but notionally it could have a processing capacity of up to 5 million tonnes of carbon dioxide (CO2) per year.
Woodside, BP, MIMI (owned by Mitsui and Mitsubishi), Shell and Chevron will each hold a 20% participating interest in the permit, with Woodside as operator.
As Energy Voice reported last week, Woodside also won the G-8-AP permit in the Browse basin offshore Western Australia as part of the 2021 release announced last December.
Inpex was also awarded permit G-7-AP in the Bonaparte basin. Aside from France’s TotalEnergies, Woodside is also a partner in the permit.
The government hopes its first GHG storage acreage release since 2014 will help provide a pathway for potential CCS projects. The offshore bidding round, which closed in March, covered five areas for prospective GHG storage offshore the Northern Territory and Western Australia in the Bonaparte, Browse and Northern Carnarvon basins.
Doubts – The Carbon Capture Crux ?
However, the Institute for Energy Economics and Financial Analysis (IEEFA), a thinktank, today released a report The Carbon Capture Crux – Lessons Learned, which claimed that “CCS technology has been going for 50 years and many projects have failed and continued to fail, with only a handful working.”
“Many international bodies and national governments are relying on carbon capture in the fossil fuel sector to get to Net Zero, and it simply won’t work,” said Bruce Robertson, author of the report.
“Although some indication it might have a role to play in hard-to-abate sectors such as cement, fertilisers and steel, overall results indicate a financial, technical and emissions-reduction framework that continues to overstate and underperform,” he added.
IEEFA’s study found that Shute Creek in the US underperformed its carbon capture capacity by around 36% over its lifetime, Boundary Dam in Canada by about 50%, and the Gorgon project off the coast of Western Australia by about 50% over its first five-year period.
“The two most successful projects are in the gas processing sector – Sleipner and Snøhvit in Norway. This is mostly due to the country’s unique regulatory environment for oil and gas companies,” noted Robertson.
While the Australian government has approved several new massive offshore greenhouse gas storage areas over the past week or so, saying CCS “has a vital role to play to help Australia meet its net zero targets. Australia is ideally placed to become a world leader in this emerging industry”, Robertson retorts that “carbon capture technology is not new and is not a climate solution.”
However, as one industry source told Energy Voice “there are many points I would dispute in Robertson’s report, but the most egregious error is the comment that much of this captured carbon will be used for enhanced oil recovery. This is patently untrue. Almost all of the projects being developed worldwide now are pure storage plays – the GCCSI has the statistics. Historically it has been used mainly for EOR because there was an incentive to do it. It wasn’t pretending to be a climate solution.”
Despite Roberton’s scepticism hopes are high that CCS will help abate emissions from fossil fuel production. Inpex’s proposed CCS project offshore northern Australia is particularly interesting as its permit lies in a basin that is seen as analogous to the geological setting of Sleipner CCS offshore Norway, the first dedicated aquifer-based storage project in the world. Sleipner is the world’s first industrial-scale CCS project for the purpose of carbon emission abatement and has been successfully injecting 1 million tonnes per year (t/y) since 1996, as part of a gas field development.
Hopefully, Inpex (TYO:1605), which starts appraisal drilling at its permit next year, will be able to replicate Sleipner’s success.
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