Santos and Eni said on Monday that they were considering converting a depleted gas field in the Timor Sea into a carbon capture and storage (CCS) project. The move comes after Eni shelved its Australian gas asset sale earlier this year on the lack of attractive bids. The two companies operate the Bayu Undan gas field in the Timor Sea, which is set to run dry in 2023. The tax revenue from the gas field is Timor Leste’s main source of income. This means that the country will have to find new sources of income.
Santos CEO Kevin Gallagher said Bayu Undan CCS would take emissions from the industry in Australia’s Northern Territory. The company said the opportunities are “extremely exciting,” but it did not disclose the estimated cost of the conversion project. Bayu Undan field supplies feedgas for the companies’ Darwin LNG plant. Santos aims to be carbon neutral in the next two decades.
Santos and Eni also signed an MoU to develop gas fields off northwest Australia and expand LNG exports from the Darwin plant. Credit Suisse analysts said it is too early to estimate whether the companies’ CCS and expansion plans could be profitable.
