AUSTRALIAN OFFICIAL: GORGON CCS PROJECT ON TRACK TO START INJECTING IN 2015

Tamar Hallerman
GHG Monitor
10/26/12

Australia’s energy minister this week confirmed that the world’s largest planned carbon capture and storage project is on track to begin CO2 injection in western Australia beginning in 2015. In a speech at the National Carbon Capture and Storage Conference in Perth, Australia, Martin Ferguson said that the Gorgon CO2 Injection Project will inject 3.5 million tons of CO2 annually into a deep saline reservoir nearly a mile and half below Barrow Island. “The project is on track to commence CO2 injections in 2015,” Ferguson said.

Operated by a joint venture group that includes oil giants Chevron, ExxonMobil, Royal Dutch Shell and others, the planned 40-year, $43 billion industrial CCS and natural gas project will capture CO2 from a liquefied natural gas processing facility and pipe it roughly four miles away to an onshore deep saline aquifer. The processing facility will separate gas extracted from the CO2-rich Greater Gorgon gas fields, located roughly 100 miles off the west coast of Australia. Construction began onsite in 2009. The government has agreed to accept all long-term liability for the project.

Gorgon to be Australia’s First Commercial-Scale Demo

Throughout his speech, Ferguson underscored Australia’s role as a leader in developing CCS technologies and projects. “Investment in CCS makes a lot of sense for Australia,” he said. “Our economic and population growth rates are above the OECD average. We have a heavy reliance on fossil fuels, particularly coal, for power generation and production and the mining processes for our major exports also tend to be energy intensive. More than this, the nature of our energy exports means that it is very important that we invest in CCS.”

Gorgon is Australia’s first commercial-scale demonstration project to come online, but Ferguson in his speech also cited progress on several other demonstration projects currently under development in the country. He said that the 30 MW Callide-A Oxyfuel CCS project in Queensland is soon ready to begin its operational phase, while the South West Hub Project in the southwest portion of the country is “progressing well” and has drilled a well that could help determine whether a site in the Lesueur formation is suitable for CO2 storage. That project, which received $52 million in funding from the Australian government, is ultimately testing to see if the Lesueur could be a potential storage hub for CO2 emissions for the industry in the surrounding area, which has a large concentration of coal-fired power plants. Developers are hoping to store 3.3 million tons of CO2 there annually, according to the government’s Department of Mines and Petroleum. Ferguson said feasibility work is also underway at another government flagship project, the Victorian CarbonNet Project, which aims to determine the feasibility of storing emissions in southeast Australia’s Latrobe Valley.

Australia Sees Big Energy Policy Changes

Gorgon, along several of the other CCS projects under development, was developed in anticipation of the carbon pricing regime levied by the Australian government earlier this summer by the ruling Labor government. The $23 per ton CO2 tax rolled out in July will increase gradually through summer 2015, when it will be transitioned into a cap-and-trade scheme. The government also implemented a goal of reducing greenhouse gas emissions by at least 5 percent below 2000 levels by 2020, eventually reducing emissions 80 percent below those levels by mid-century. In his speech, Ferguson said the emissions reduction targets in particular are a reason for the country to further pursue CCS. “Achieving these targets represents a huge challenge,” he said. “It is because the Australian government is committed to achieving our greenhouse gas reduction targets that it strongly supports the development of CCS technologies.” However, Ferguson acknowledged that there needs to be a “significant uptake” of CCS projects beginning in the 2030s in order to reach the country’s 2050 goal.

Australia’s energy ministry is also expected to release a final version of an energy white paper later this year. Ferguson said the document, which will identify priorities through 2035, will focus heavily on commercializing technologies like CCS. “The energy white paper will highlight CCS as a key part of our energy mix into the future,” he said. Ferguson added that the white paper will recommend that the energy ministry develop a CCS roadmap for the industry through 2030, while also moving forward on the development of more large-scale demonstrations, R&D work and CCS regulatory frameworks that could aid in the development of CCS.