Santos advances carbon-neutral e-methane project

Santos Energy Solutions, an energy transition business of Australian oil&gas player Santos, has entered into an agreement with Osaka Gas Australia (OGA) to advance its project for producing carbon-neutral e-methane from green hydrogen.

Santos entered into an agreement with the subsidiary of Japanese natural gas provider Osaka Gas for pre-front-end engineering and design (Pre-FEED) work on the demonstration-scale project.

The project aims to produce e-methane from green hydrogen, which is generated through water electrolysis powered by renewable energy, and CO2, which instead of being emitted into the atmosphere, is captured at industrial sites or by Direct Air Capture technology.

Santos and OGA will commence Pre-FEED, which will include renewable power and carbon capture infrastructure studies, site selection for e-methane and green hydrogen plants, optimisation of e-methane production efficiency and processes, and further detailed assessment of costs, schedules, feasibility, and risks.

Santos is studying the potential to use its existing infrastructure position to generate, liquefy and export e-methane to Japan.

Looking ahead, the two companies aim for FEED entry in 2024 and to be ready for final investment decision in 2026 to produce e-methane at a plant with a planned capacity of 10 TJ/day and export about 60,000 tonnes of e-methane annually by 2030.

Santos Managing Director and CEO Kevin Gallagher said: “I believe it is increasingly clear gas will play a leading role in the transition to a decarbonised future, and Santos is excited to be progressing a new business opportunity that seeks to leverage our assets and capabilities to deliver a cleaner energy that will help create a better world for everyone.

“Decarbonising natural gas supports a long-term supply of reliable and affordable energy, as well as the production of cleaner fuels such as e-methane. The advantage of e-methane is that it overcomes the challenges associated with the transport and export of hydrogen by allowing the use of existing transport, liquefaction and end-user infrastructure providing a scope 1 and 2 as well as a scope 3 carbon neutral outcome.”

Santos Energy Solutions is developing one of the world’s largest carbon capture and storage projects in Moomba, South Australia, which is expected to store up to 1.7 million tonnes of CO2 each year with the first injection on track for 2024.

The company is also planning to trial Direct Air Capture, a technology used to capture CO2 from the atmosphere, which could be used to expand the Moomba CCS project and provide feedstock for e-methane production at Moomba.