Indonesia’s President Joko Widodo announced the launch of a carbon capture, utilization, and storage (CCUS) project in West Papua province, as reported by Reuters on November 24. The project will be operated by British oil major BP [BP:LN], marking Indonesia’s first carbon storage scheme. An energy ministry official disclosed that BP will invest USD2.6bn in the project, but BP has yet to announce a specific investment figure. The project will have the potential to store up to 1.8 gigatons of carbon dioxide (CO2), with the first carbon injection expected in 2026. The project follows BP’s recent completion of the USD4.83bn Tangguh Train 3 liquefied natural gas (LNG) project in West Papua.

Indonesia, largely relying on fossil fuels, sees carbon capture and storage (CCS) and CCUS projects as crucial tools in its pursuit of decarbonization and energy transition. The country looks to utilize its depleted hydrocarbon reservoirs as storage facilities for greenhouse gases. It has an estimated carbon storage capacity of 8 gigatons in depleted oil and gas reservoirs and 400 gigatons in saline aquifers. Currently, the country has 15 CCS and CCUS projects in various stages of preparation, including BP’s project, with a combined investment close to USD8bn. Recently, US oil and gas giant ExxonMobil [XOM:US] also announced a plan to invest USD15bn to develop CCS facilities and petrochemical projects in Indonesia. Moreover, the Indonesian government is finalizing a regulation that would allow greenhouse gases from abroad to be stored in the country.

Sources:

https://www.reuters.com/business/energy/indonesia-launches-first-carbon-storage-project-west-papua-2023-11-24/

https://www.rigzone.com/news/exxonmobil_plans_to_build_refinery_ccs_facility_in_indonesia_jokowi-20-nov-2023-174755-article/

https://www.reuters.com/business/environment/indonesia-moves-closer-allowing-cross-border-carbon-storage-2023-10-31/