ExxonMobil has withdrawn an application to store carbon dioxide under the seabed of the Bass Strait but says it will continue to pursue the idea.
The US major started a feasibility study two years ago into using an old platform to store up to two million tonnes of CO2 a year in the depleted Bream oil and gas field and planned to start operating as early as 2025.
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Last week, the US giant withdrew its application for Commonwealth environmental approval.
An ExxonMobil spokesman said its South East Australia Carbon Capture and Storage (CCS) Project initially considered utilising the Bream A platform.
"Whilst we believe that the Bream field could provide a suitable CO2 storage location, we have determined that the Bream A platform is not required to support any CCS project and will proceed with decommissioning the facility in accordance with our regulatory obligations," he said.
In 2021 offshore regulator NOPSEMA ordered ExxonMobil to plug 180 wells and commence dismantling ten platforms, including Bream A, by September 2027.
The regulator said the deterioration of facilities from delayed decommissioning threatened ExxonMobil's ability to do the job without increasing safety and environmental risks.
ExxonMobil Bass Strait maintenance & decommissioning blasted Bass Strait partners ExxonMobil and BHP must plug 180 wells, dismantle ten platforms and tackle life-threatening corrosion after intervention by offshore safety regulator NOPSEMA.
If the Bream A platform had been helpful for carbon storage, ExxonMobil would likely have been able to delay the expense of removing it.
In December, ExxonMobil contracted European firm Allseas to remove up to 12 platforms with its Pioneering Spirit vessel that can lift up to 48,000 tonnes. A three to four-month campaign will start in late 2027.
The ExxonMobil spokesman said the Gippsland Basin was a world-class oil and gas basin and had all the characteristics to be the same for CCS.
"We continue to explore opportunities to utilise the Bream reservoir for CCS, as well as screening other larger gas fields and associated infrastructure still involved in producing gas," he said.
Kevin Morrison, energy finance analyst with the Institute for Energy Economics and Financial Analysis, said Exxon's decision underlined the difficulty of developing CCS projects.
"They have a history of failing to capture the volumes of CO2 they target as they are plagued by technical issues," he said.
ExxonMobil owns a 25 per cent stake in Chevron's Gorgon project off WA, where a carbon storage system is operating at only one-third of its design capacity nine years after gas exports began.
Morrison said Exxon's lack of progress with its CCS project contradicted the narrative of some promoters who gave the impression that replacing gas in the reservoir with CO2 was a straightforward process.
"Hopefully, the move by ExxonMobil will increase scrutiny on CCS projects that plan to repurpose existing production infrastructure and defer their decommissioning responsibilities," he said.
Other depleted offshore oil and gas fields around Australia where CCS is being investigated are:
The ExxonMobil-operated oil and gas facilities in the Bass Strait are 50 per cent owned by Woodside.
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