Santos, a leading Australian oil and gas company, has secured $150 million in financing for its share of the $220 million Moomba carbon capture and storage (CCS) project in South Australia. This landmark project aims to reduce carbon emissions and drive decarbonization efforts as part of Santos’ transition to clean energy.
The 5-year financing facilities will cover costs incurred so far on the CCS project and provide funding as work progresses towards the first injection target date in mid-2024.
CEO Emphasizes Importance of CCS for Reaching Net Zero Goals
In announcing the financing deal, Santos CEO and Managing Director Kevin Gallagher highlighted banks’ willingness to fund cutting-edge energy transition projects at competitive rates.
“This support indicates the finance industry’s recognition of CCS as a vital tool for reaching global net zero ambitions,” said Mr. Gallagher. “Our Moomba CCS project will help abate emissions from natural gas, which is critical to reduce greenhouse gases while tackling climate change.”
According to Santos’ head, the project’s progress reflects the company’s Climate Transition Action Plan that focuses on slashing emissions and developing low-carbon solutions as customer demand evolves.
Moomba CCS Reaches Key Milestones on Path to 2024 Launch
The Moomba CCS project in South Australia has completed 80% of phase one construction and is on track for launch in 2024. With a breakeven cost forecast at around $24 per ton of carbon dioxide, it will be one of the most affordable CCS projects worldwide.
Initially, the facilities will have capacity to store up to 1.7 million tonnes of CO2 annually, equal to 28% of Australia’s total electricity sector emissions reduction last year. As such, it represents a major opportunity for industries like oil and gas, steel, aluminum and cement to abate their carbon emissions.
Santos has been signing agreements with companies worldwide to evaluate transporting and storing their CO2 emissions at Moomba. The company aims to transform the resource-rich Cooper Basin into a decarbonization hub offering CCS alongside potential low-carbon fuel production.
Financing Reflects Growing Importance of CCS Solutions
Carbon capture and storage traps CO2 emissions before they enter the atmosphere and injects them into geological formations deep underground for permanent sequestration. Along with directly air capturing CO2, it is one of the few proven methods for removing emissions already in the air.
Most models aligned with the Paris Agreement’s 1.5°C global warming target rely heavily on scaling up CCS to reach net zero emissions globally. Per the Intergovernmental Panel on Climate Change, natural gas demand may rise up to 40% in Asia by 2050 under such scenarios.
Santos’ ability to secure financing reflects growing recognition in the finance industry that CCS is indispensable for offsetting emissions from gas use and hard-to-decarbonize sectors. Moomba’s progress shows CCS can support continued natural gas utilization in Asia-Pacific markets during the clean energy transition.
The project exemplifies Santos’ broader efforts to address sustainability while meeting regional energy needs. Its innovation and affordable solutions aim to balance economic development and climate action as the world shifts towards net zero.
Securing funding enables Santos to lead commercial-scale CCS adoption regionally and globally. In turn, success at Moomba will inform best practices for emissions reduction across carbon-intensive industries. Santos’ Integrated Asset Management approach considers the full emissions lifecycle to make sustainable energy accessible worldwide.
