The Bayu-Undan carbon capture and storage (CCS) project is critical for managing the high volumes of carbon dioxide associated with the Barossa gas field offshore northern Australia. Operator Santos has completed front-end engineering and design work and is ready for a final investment decision (FID), which is now targeted for the second half of 2027. Finalizing this decision requires completed cost estimates from contractors and support and approvals from the governments of Australia and Timor-Leste.

Project Location and Jurisdictional Complexity

The project plans to repurpose the Bayu-Undan field for CO2 injection. However, the field lies within Timor-Leste's jurisdiction, and the Timorese government has expressed interest in redeveloping the field for additional hydrocarbon production before its conversion to a CCS site, creating uncertainty around the project's timeline.

Current Emissions from Barossa

While awaiting a CCS solution, Santos and its Barossa joint venture partners—SK E&S and Jera—are venting CO2 into the atmosphere as per the approved development plan. The Barossa gas contains a very high CO2 concentration of 16% to 20%. Emissions from the floating production vessel are projected to be between 2.1 million and 3.8 million tonnes per annum. For perspective, this potential CO2 output could exceed the LNG production capacity of the associated Darwin LNG plant, which is 3.7 million tonnes per annum.

Emission Management and Offsetting

Under current regulations, the project is required to offset all its reservoir CO2 emissions from the start of production. Santos's plan is to purchase carbon credits to offset these emissions until the Bayu-Undan CCS project becomes operational. The company noted that current CO2 emissions during the commissioning phase are slightly elevated but will align with environmental commitments during full production.