Santos secures $150m financing for Moomba CCS Project in South Australia

In a significant stride towards energy transition and carbon capture initiatives, Santos has successfully secured financing for its share of the US$220 million Moomba Carbon Capture and Storage (CCS) project located in South Australia. The financing, amounting to US$150 million with a tenure of five years, aims to cover the incurred project costs to date and facilitate further development towards the first injection, anticipated by mid-2024. This move underscores the banking sector’s growing acknowledgment of CCS technology as an essential component in achieving global net-zero goals, offering very competitive rates for energy transition projects.

Kevin Gallagher, the CEO and Managing Director of Santos, expressed his satisfaction over the banks’ willingness to fund such projects, viewing it as a testament to the critical role of CCS in fulfilling the world’s net-zero ambitions. Gallagher’s remarks highlight the project’s alignment with Santos’s Climate Transition Action Plan, emphasizing emission reduction and the development of low-carbon fuels in response to evolving customer demands. He pointed out the importance of abating emissions from natural gas to combat climate change, noting the project’s potential to significantly contribute to this goal.

The Moomba CCS project, which has reached an 80% completion milestone in its first phase, is set to become one of the most cost-effective CCS initiatives worldwide. With lifecycle breakeven storage costs estimated at around US$24 per tonne, it stands out as a highly competitive solution compared to other carbon-abatement technologies. The project is designed to store up to 1.7 million tonnes of CO2 annually, which is expected to account for approximately 28% of the total emissions reduction in Australia’s electricity sector last year.

The Cooper Basin, integral to the Moomba project, is poised to transform into a decarbonization hub, facilitating the production of low-carbon fuels and offering CCS services. This could significantly reduce emissions from crucial sectors such as LNG, steel, aluminium, and cement. Santos has also initiated collaborations with international parties to explore opportunities for capturing, transporting, and sequestering emissions at Moomba, further extending its impact on global decarbonization efforts.

The financing of the Moomba CCS project by Santos marks a pivotal moment in the energy sector’s transition towards sustainable practices. By securing competitive funding for such a critical project, Santos not only advances its own climate goals but also sets a precedent for the role of CCS in global emissions reduction strategies. The project’s emphasis on cost-effectiveness and its potential impact on hard-to-abate industries reflect a holistic approach to tackling climate change, positioning CCS as a viable and essential technology in the quest for net-zero emissions.