Offshore Technology

Daily Newsletter

09 August 2023

Daily Newsletter

Bayu-Undan JV partners sign MoU with TIMOR GAP

The alliance aims to explore possible collaborations for the proposed Bayu-Undan CCS project.

Australian energy company Santos and its Bayu-Undan joint venture partners have signed a memorandum of understanding (MoU) with TIMOR GAP.

The purpose of the MoU is to explore possible collaborations for the proposed Bayu-Undan carbon capture and storage (CCS) project off the coast of Timor-Leste.

It calls for the exchange of knowledge regarding the Bayu-Undan CCS project and the investigation of prospective business collaborations, including TIMOR GAP's equity involvement in the project.

TIMOR GAP is the Timor-Leste-Government-owned oil and gas company.

The agreement comes after Santos signed four non-binding MoUs for CO₂ delivery to the Bayu-Undan CCS project. These agreements indicate that the demand for CO₂ storage at the project could be more than ten million tonnes annually.

According to Santos, the proposed project could lower the overall emissions and the intensity of emissions from gas and liquefied natural gas operations in Australia and Timor-Leste as well as from other hard-to-abate industries in the region.

The Bayu-Undan project is part of Santos’ three-hub CCS strategy and the final investment decision is targeted for 2025.

Santos managing director and CEO Kevin Gallagher said: “Santos and our joint venture partners are delighted to be working with TIMOR GAP on partnership opportunities to advance Bayu-Undan CCS as a carbon storage hub for customers in Australia, Japan, Korea and across Asia as those countries seek to decarbonise their economies.

“We look forward to working with TIMOR GAP and the Timor-Leste and Australian governments to progress the necessary commercial, fiscal and legislative arrangements to support the development of the Bayu-Undan CCS project.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.