Australia’s main oil and gas industry lobby group claims there has been strong interest in acreage releases for new carbon capture and storage (CCS) opportunities off Western Australia and the Northern Territory. Significantly, Australian producers need to be at the forefront of carbon-neutral liquefied natural gas (LNG) or “green LNG” to remain competitive and CCS is considered one potential route to help achieve this.
As bidding closed yesterday, the Australian Petroleum Production & Exploration Association (APPEA) welcomed the opportunity for members to bid for five areas in Commonwealth waters to explore greenhouse gas storage opportunities.
APPEA chief executive Andrew McConville said the sector’s technological expertise and commitment to reducing emissions provided it with an advantage to deliver more as well as ultimately support a new hydrogen industry.
“We understand members showed strong interest in this release, illustrating a solid backing of the pathway to a lower emissions, cleaner energy future,” McConville said.
“CCS has an important role in lowering the carbon intensity of gas production and in supporting the development of a blue hydrogen industry,” he added.
Still Australia is far away from creating a carbon creditation system for CCS. There are also geological and technical hurdles, as evidenced by ongoing issues at the Chevron-led Gorgon LNG CCS project.
The bidding under the Federal Government’s 2021 Offshore Greenhouse Gas Storage Acreage Release was the first opportunity since 2014.
Emission-Intensive LNG Export Plants
Australia is home to some of the most emission-intensive LNG plants in the world. The average emission intensity of LNG projects globally is 0.56 tCO2e/tLNG (tonnes of carbon dioxide equivalent per tonne of LNG produced) and over half of Australian LNG plants have emissions above this level, data from Wood Mackenzie showed.
To protect market share Australian operators must reduce their carbon footprint. Initial steps are being taken, but progress is not fast enough, energy research company Wood Mackenzie said last year.
Key options being advanced include CCS and replacing gas-powered generation with renewable power and batteries.
Santos (ASX:STO) chief executive Kevin Gallagher last year warned oil and gas industry leaders that achieving net zero emissions will be crucial for the natural gas industry to avoid coal’s fate of being shunned by equity investors and lenders.
Gallagher warned delegates at the Australian Petroleum Production & Exploration Association (APPEA) conference last June that if access to capital becomes even more restricted then energy supply security and prices will increasingly be controlled by Opec producers, Russia and Qatar. However, Australia’s competitive advantage in carbon storage could help it unlock its vast oil and gas resources as the world decarbonises, he said.
