Japan’s biggest oil and gas explorer Inpex has reaffirmed its plans to establish a giant carbon capture and storage (CCS) hub near Darwin to gradually decarbonize its liquefied natural gas operations in the Territory, while still waiting on environmental approvals that could also see the facility used to offset emissions from other companies at the proposed Middle Arm industrial precinct and possibly receive imported liquid CO2 from Japan.

Inpex has previously stated it could cost more than $1 billion (AUD) to build one of the largest carbon capture facilities in the world, that would be shared with other industries, with the NT and federal governments also expected to put money towards the facility.

The CCS hub—a pipeline network connecting nodes, which are sources of carbon dioxide (CO2), with storage nodes—will secure and store the carbon dioxide produced by the Ichthys gas project in the ground. Inpex is aiming to inject 2.5 million tonnes per year of CO2 by 2030.

“The idea is being promoted by the Northern Territory Government and supported by the Federal Government, both recognising that scale matters – the ability to share infrastructure reduces costs for everyone,” Inpex vice-president of growth Phil Grainger told an energy trade publication last week.

Mr Grainger said the NT Government’s plans to develop a substantial industrial complex at Middle Arm could potentially present other emitters that would use the CCS facility. Production of blue hydrogen or blue ammonia, as touted for the precinct, would also be an obvious build-out, he said.

Inpex is also in talks with likely sources of imported liquid CO2 for the hub such as Japanese exporters from the region which are seeking storage in Australia.

Mr Grainger said that upcoming LNG processing trains at the INPEX-run Ichthys LNG or Santos-run Darwin LNG plants are future sources of CO2.

Inpex said two options are being considered on the receiving end of the hub, the Bayu Undan CCS—being put up by Santos, to store CO2 from its recently halted Barossa gas project—and the Inpex-led Bonaparte CCS Assessment Joint Venture, taken up with Woodside Energy and TotalEnergies that is evaluating a large-scale greenhouse gas (GHG) storage site in the Petrel Sub-basin.

CCS in the NT is also being touted by the gas industry in the Beetaloo Basin for offsetting emissions when the government is expected to greenlight development for the region in the near future.

The Environment Centre NT has previously been sceptical of CCS technology, saying it has not yet been proven in Australia. But the NT Government has continued to tout its effectiveness in other parts of the world.

Inpex, Woodside, and TotalEnergies in August last year obtained the GHG permit G-7-AP straddling 27,500 square kilometres offshore of the Territory’s Bonaparte basin.

“The geology we expect here is seen to be very similar to the setting for the Sleipner project in the Norwegian North Sea, the first and arguably the most successful aquifer-based storage project in the world, having stored roughly a million tonnes of CO2 per annum for over 20 years,” Mr Grainger told Energy Voice.

Inpex’s Bonaparte CCS appraisal works involve boring a couple of appraisal wells near the proposed CO2 injection site. Likewise, three-dimensional seismic survey work will take place to further evaluate the storage complex to confirm suitability for the injection and storage of CO2.

Inpex said it is ready to start work on a CCS facility after it has obtained environmental approvals.

The company, however, said its activity schedules have been altered to broaden its stakeholder consultations on its planned and unplanned activities following the Federal Court’s December 2022 decision that stopped Santos’ drilling at its Barossa gas project in the Territory.

Mr Grainger said the decarbonizing of Ichthys LNG, which has a life span of at least another 35 years, is Inpex’s priority.

He said that Australia is the immediate focus of Inpex’s decarbonization effort, as it intends to ensure that it sustainably continues production.

In addition to developing CCS to store emissions from Ichthys LNG, the company wants to introduce renewable power to back out gas-fired generation at its plant.

Ichthys LNG is a joint venture between INPEX group companies—with a 66.245 per cent stake; TotalEnergies, holding a 26 per cent interest; the Australian subsidiaries of CPC Corporation, Taiwan, 2.625 per cent; Tokyo Gas, 1.575 per cent; Osaka Gas, 1.2 per cent; Kansai Electric Power, 1.2 per cent; JERA, 0.735 per cent; and Toho Gas, with 0.42 per cent.