Gorgon LNG to Include World's Largest Geological Carbon-Sequestration Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Gorgon liquefied natural gas (LNG) project in the northwest of Australia will incorporate a carbon dioxide capture and storage project that is tipped to be the largest in the world.

The Gorgon CO2 sequestration project involves separation and capture of the CO2 generated by the Gorgon LNG-production facility, followed by low-density compression. The CO2 will then be injected into a saline aquifier in the Dupuy Formation, which is 2.5 kilometres beneath Barrow Island. This site was chosen because of the fact that the storage area is sizeable and has the capability to store the CO2 for long periods of time; the formation is made of porous sandstone (which is preferable to rock) and is a suitable place for monitoring the stored gas.

Approximately 3.6 million tonnes of CO2 per year will be sequestered in the geological formation, accumulating to about 120 million tonnes in total. The total investment value of the project is estimated to be AUS$2 billion (US$1.8 billion). The Australian government is committing $600 million to the project. Contracts have been awarded for construction, including the provision of six compression trains by GE Oil & Gas and CO2 compressor discharge coolers and condensers from S&T Corporation (Changwon, Korea). For additional information, see March 9, 2010, article - GE Oil & Gas Wins Another Contract for Australia's Gorgon Gas Project.

The Gorgon CO2 sequestration project succeeds only a handful of projects of this kind. The first commercial-scale CO2-sequestration project to be developed for the purpose of mitigating climate change was the Sleipner project, operated by Statoil ASA (NYSE: STO) and constructed in 1996. The Sleipner project continues to sequester about 1 million tonnes of CO2 each year from a wellhead in the North Sea, halfway between Norway and Scotland.

On the southwest coast of Victoria, Australia, the Cooperative Research Centre for Greenhouse Gas Technologies (CO2CRC) has invested AUS$40 million (US$35.7 million), largely funded by the Australian government, into the Otway Basin project. The CO2CRC project is a pilot study that began in April 2008, with Phase I developed to demonstrate that CO2 can be safely captured, transported and stored underground in Australian conditions. By the fourth quarter of 2009, 65,000 tonnes of CO2 had been injected without any leakages, leading to a decision to begin a second phase of development, which is predominantly geared toward greater research into CO2 sequestration possibilities.

Woodside Energy Limited (ASX:WPL) (Perth, Western Australia) operates the Browse LNG development, which is currently in the basis-of-design phase (pre-FEED), with first gas planned for 2017. Woodside is assessing the option of developing an upstream CO2 sequestration component.

Mitigating climate change has become a sensitive issue for leading oil and gas companies, and Chevron Corporation (NYSE:CVX) (San Ramon, California), which has a 50% interest in the Gorgon project, along with partners Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), Osaka Gas, Tokyo Gas and Chubu Electric Power are committed to lessening the environmental impact of the entire Gorgon project. Engineering, procurement and construction company Kellogg Joint Venture and specialist contractors are utilising new technology and innovation in the development of the Gorgon CO2 sequestration project. The AUS$43 Billion (US$37 Billion) Gorgon project is a large-scale project by global standards and has an estimated lifetime of 40+ years, supplying natural gas to the domestic market and producing LNG for export. The project will supply 300 terajoules per day of natural gas to the domestic market in Western Australia from the natural gas processing plant and a total of 15 million tonnes per year of LNG. Construction of the three-train LNG production plant has begun, with earthworks under way since May 2010.

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