Australia’s only large-scale CCS project operated at half-capacity in first full year

Chevron's Gorgon CCS project has underperformed in its first year of operation. (Photo credit: Chevron).
Chevron’s Gorgon CCS project (Photo credit: Chevron).

Australia’s only large-scale carbon capture and storage project, the Chevron’s Gorgon CCS facility, operated at just over half its promised capacity in the last financial year, the company’s latest project update reveals.

The underperformance saw millions of tonnes of additional greenhouse gas emissions released by the massive Gorgon LNG project – as the project battled through issues with sand clogging CCS equipment and regulator-imposed restrictions on carbon dioxide injection rates.

The project’s troubles have been detailed in an annual project update prepared by Chevron and released by the federal government through a freedom of information request lodged by WA Today journalist Peter Milne.

The update shows the Gorgon CCS project stored 2.26 million tonnes of carbon dioxide during the 2020-21 financial year – well short of the 4 million tonne annual storage target set for the project.

It has contributed to a $40 million bill for Chevron to make up for its failure to meet its carbon storage targets.

The construction of the CCS project, which is supposed to capture and store carbon dioxide that is extracted along with fossil gas from the Gorgon reserve, was a condition of Chevron’s approvals for the Gorgon LNG project.

The project has consistently underperformed since it was commissioned in late 2019 – the commissioning itself was several years behind schedule.

One of the major issues impacting the project has been sand that has clogged parts of the CCS system, causing the project to significantly reduce the amount of carbon dioxide injected into the undersea reservoir.

Due to additional issues relating to the project’s pressure management system, the WA Department of Mines, Industry Regulation and Safety imposed a limit on the amount of carbon dioxide that may be stored, further exacerbating the project’s level of underperformance during the 2020-21 financial year.

Source: Chevron

The latest project update report shows the CCS project also shut down entirely for a period of about six weeks in 2021, while scheduled maintenance work was undertaken at parts of the LNG project.

In the project update, Chevron said that it had been progressing work to ‘de-sand’ the CCS project and reported that it had increased the budget for the project from $3.092 billion to $3.147 billion – an increase of $55 million, to account for an increase in expenditure on the project.

Chevron said it aimed to complete the additional repair works in late 2021 and hoped to restore injection rates to expected levels.

“A de-sanding project was initiated to remediate the issue through an upgrade of the surface facilities to remove sand from the process stream and was successfully started up at both drill centres by the end of the reporting period. Chevron is working closely with the regulatory body on this issue and remains on track to meet the requirements of the conditional consent to operate by 30 November 2021,” the report says.

As a result of the underperformance and the resulting failure to meet the project’s approval conditions, Chevron was forced to negotiate a deal with the Western Australian state government to invest $40 million in carbon offset projects that effectively account for the emissions the Gorgon CCS project has failed to store to date.

In November, Chevron announced that it had reached an agreement with the WA government to purchase and surrender 5.23 million tonnes worth of carbon offsets, in addition to other investments in “lower-carbon projects.“

Chevron said that since the commissioning of the CCS project in August 2019, it had stored around 5.5 million tonnes of greenhouse gas emissions, suggesting the project has operated at just over half the capacity promised to the WA government.

Chevron plans to operate the CCS project for between 40 to 45 years, ultimately storing more than 100 million tonnes of carbon dioxide.

The LNG project itself will be responsible for a significant increase in greenhouse gas emissions, with the capacity to produce 15.6 million metric tonnes of LNG per year and could operate until after 2070.

Michael Mazengarb is a Sydney-based reporter with RenewEconomy, writing on climate change, clean energy, electric vehicles and politics. Before joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.

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