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Repsol to start operating 'first' CCS facility in Indonesia by 2027
Ahead of the much-anticipated COP26 at the end of this month, Repsol has announced its plan to install what it claims will be the first operational CCS facility in Indonesia by 2027.
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panish oil and gas company Repsol plans to launch its inaugural carbon capture and storage (CCS) project in Indonesia in 2027, touting it as the first operational CCS project in the country and among the biggest in the world.
Repsol director of regional exploration Eastern Hemisphere Mikel Erquiaga said that, starting in 2027, the company planned to begin injecting roughly 2 million tons of captured carbon dioxide (CO2) per year into the depleted Dayung and Gelam fields in the Sakakemang Block in South Sumatra.
Read also: SKK Migas approves $282m plan for Repsol in gas-rich Kaliberau field
This would be three years before other CCS projects in Indonesia, which were still in their pilot phase, he added.
“This is an important milestone for Repsol,” Erquiaga said during a virtual discussion to mark Repsol Low Carbon Day on Oct. 5.
CCS projects have been gaining momentum worldwide. The International Energy Agency (IEA) says the technology is critical to hitting global net zero goals, but it had been plagued with a high failure rate due to high capital costs, unclear revenue streams and limited technological readiness that risked leakage, as well as other issues.
Challenges to developing CCS projects in Indonesia included the lack of a regulatory framework and high financial costs, said Erquiaga, but Repsol expected a new task force under Energy and Mineral Resources Ministry to finish formulating a CCS regulation to address some of these issues by the year-end.
Repsol’s Sakakemang CCS project would rank among the world's 10 biggest operational CCS projects by capacity in 2020, when ExxonMobil's Shute Creek facility in Wyoming, the United States, topped the list with a carbon capture capacity of 7 million tons per annum, according to Statista.
“We welcome [Repsol’s CCS project], as it is expected to support the government’s commitment to reduce carbon emissions,” Rinto Pudyantoro, the spokesman of the Upstream Oil and Gas Special Regulatory Task Force (SKK Migas), told The Jakarta Post on Tuesday.
Just last month, SKK Migas green-lighted oil supermajor BP’s CCS project at the Tangguh liquefied natural gas (LNG) plant in West Papua.
Last year on Dec. 29, SKK Migas approved Repsol’s US$282 million plan of development (PoD) for the gas-rich Kaliberau Field in the Sakakemang Block. Kaliberau Field has an estimated 2 trillion cubic feet (tcf) of recoverable resources according to initial estimates announced in 2019, making it the biggest gas discovery in Indonesia in almost two decades.
Executive director Fabby Tumiwa from the Institute for Essential Services Reform (IESR), an energy research nonprofit, said separately on Tuesday that the Sakakemang CCS project would provide technical, financial and risk insights on installing and running CCS facilities in Indonesia as a basis for assessing future projects.
However, he underlined that “the best option for reducing greenhouse gas emissions is to use clean energy and not rely on complex and expensive solutions like CCS”.
Read also: Committed to CO2 emissions reduction, Pertamina teams up with Japanese company and ITB
Putra Adhiguna, energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said separately on Tuesday that the key question was whether the producing company or the government would bear the high cost of CCS facilities.
“The CSS project in Sakakemang is a step in the right direction to reducing carbon emissions,” he told the Post.
