Gorgon CCS in Australia Falls Further from Declared Target: IEEFA

The Chevron Corp.-operated Gorgon CCS project offshore Western Australia captured in the last fiscal year (FY) just 30 percent of the carbon dioxide (CO2) emitted from natural gas extraction by the Big Oil-led Gorgon LNG and domestic gas project, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

FY2023–24 marks the carbon capture and storage (CCS) project’s lowest performance since it started operating August 2019, IEEFA said Thursday. Gorgon CCS, located at the Gorgon gas facility on Barrow Island, had a capture rate of 34 percent in FY2022–23 and 33 percent in FY2021–22, according to calculations by the Cleveland, Ohio-based think tank. Chevron Australia Pty. Ltd.’s financial year starts July and ends the following June.

The CCS project had been approved on the condition it captures, on a five-year rolling average from 2016, at least 80 percent of CO2 emissions from wells drilled for the gas facility, according to information published online by Chevron Australia. The gas facility, which has a liquefied natural gas (LNG) capacity of 15.6 million tons per annum and a domestic gas supply capacity of 300 terajoules a day, sources feed from the Gorgon and Jansz–Io gas fields.

It was only three years later, however, that Gorgon CCS started up. “Once fully operational, the carbon dioxide injection facility will reduce Gorgon’s greenhouse gas emissions by about 40 percent, or more than 100 million tonnes over the life of the injection project”, Chevron Australia said in a statement August 8, 2019, announcing the commencement of operation.

IEEFA said the underperformance reflects a trend among CCS projects across the globe and casts doubt “on the financial viability of ambitious CCS plans by Australian governments and companies”.

So far Gorgon CCS has captured 44 percent of CO2 removed during gas extraction between FY2019–20 and FY2023–24, according to the IEEFA.

“The captured reservoir emissions represent a very small proportion of the project’s total emissions”, it said. “In one of its planning documents, Chevron estimated that the Gorgon project would emit around 50 million tonnes a year.

“This includes Scope One (emissions from removal of CO2 in gas field), Scope Two (CO2 in the gas liquefaction process) and Scope Three emissions (when gas is combusted by consumers such as electricity generators). Scope Three represents the largest share of total emissions.

“Assuming total emissions of about 50 million tonnes of CO2-equivalent (MtCO2e) since FY2019-20, this would mean that the CCS plant would have reduced those emissions by about 10 MtCO2 to 240 MtCO2e, or a 4 percent decrease”.

A fact sheet published online by Chevron Australia shows over 10 million metric tons of CO2 have been injected in Gorgon CCS as of August 2024.

“The key reason behind Gorgon’s underperformance is issues with the reservoir pressure, which has to stay within a certain range”, the IEEFA said. “As a result, the pressure of the CO2 injection system has had to be constrained”.

Chevron Australia has not responded to a request for comment emailed by Rigzone, but it says in the fact sheet it is “committed to increasing carbon dioxide injection rates at Gorgon CCS in accordance with its environmental approvals”.

“A project has commenced that aims to expand the system’s capacity to manage water found within the reservoir where carbon dioxide is stored, thereby reducing reservoir pressure and enabling increased carbon dioxide injection rates”, the fact sheet states.

“In addition to this project, Chevron Australia continues to explore options to further increase carbon dioxide injection rates within the system”, it adds.

The Gorgon joint venture comprises Chevron with a 47.3 percent stake, Exxon Mobil Corp. with 25 percent, Shell PLC with 25 percent, Osaka Gas Co. Ltd. with 1.25 percent, MidOcean Energy LLC with one percent and JERA Co. Inc. with 0.417 percent.

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