Japan's JOGMEC, Mitsui to study feasibility on CCS in Western Australia

FILE PHOTO: The logo of Japanese trading company Mitsui & Co. is seen in Tokyo, Japan, January 10, 2018. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - State-run Japan Oil, Gas and Metals National Corp (JOGMEC) and Mitsui & Co Ltd said on Monday they will jointly study the feasibility of carbon capture and storage (CCS) in Western Australia, using Mitsui's assets.

The move comes as a part of their efforts to create a supply chain of ammonia as a fuel in Western Australia to help combat climate change, they said in the statements.

Ammonia is used for fertiliser and industrial materials, but is also seen as an effective future energy source, along with hydrogen. It does not emit carbon dioxide when burned, but its production produces emissions if it is made with fossil fuel.

Mitsui E&P Australia (MEPAU) is currently developing the Waitsia gas field in Western Australia as an operator, in which it holds a 50% stake. MEPAU also holds a 100% stake in a depleted gas field close to the Waitsia gas field.

JOGMEC and Mitsui will consider production and export of ammonia made from hydrogen generated from natural gas produced in the Waitsia gas field, and storing CO2 emitted from the process into the nearby depleted gas field.

As a first step, the joint study will research the effectiveness of CCS in the depleted gas field.

Japan has set a target to grow the nation's ammonia fuel demand to 3 million tonnes a year by 2030 from zero now and to create a supply chain of the fuel in a bid to cut CO2 emissions.

Mitsui also said it has agreed with Wesfarmers Chemicals, Energy & Fertilisers Ltd, a unit of Australia's Wesfarmers Ltd, to jointly study the commercial and technical viability of building a low carbon ammonia production plant in Western Australia.

(Reporting by Yuka Obayashi)

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