Carnarvon Petroleum formed a joint venture to produce green diesel and is eyeing the production of carbon offsets as it becomes the latest oil and gas player to seek to head off an escalation of climate pressures around its oil production plans,
The 50:50 joint venture with Frontier Impact Group will focus on the production of renewable diesel from plant biomass in a refinery that would also produce biochar that can be further refined into graphene.
Production from the $100 million bio-refinery is targeted for late 2022, ahead of Carnarvon’s target for the restart of production from its Buffalo oil field in Timor-Leste in late 2023 and the start of its $2.6 billion Dorado oil project with Santos two years later.
Carnarvon was one of the oil and gas players targeted by the Australian Securities and Investments Commission last year over non-disclosure of climate change risks. It has since produced its first sustainability report and aligned its climate change-related disclosure with the Taskforce on Climate-related Financial Disclosures system.
It has now also committed to net zero carbon emissions before 2050, with all its current Scope 1 and 2 emissions to be offset.
Chief executive Adrian Cook said Carnarvon – which currently produces no oil or gas – had been thinking before the ASIC letter about its pathway to net zero once its fields came online.
He said the joint venture demonstrates Carnarvon’s start to delivering on its net zero commitment while also making “strong business sense”, creating another potential source of revenue and diversifying from a sole focus on fossil fuels.
The news came as industrial gases company BOC sealed a five-year deal to purchase green power from from a waste-to-energy project in Kwinana, WA, and from Shell Energy. The deal will cut BOC’s greenhouse gas emissions in Australia by 16 per cent.
BOC will buy large-scale renewable energy certificates from the Kwinana plant owned by Avertas Energy, and will start receiving electricity for its Kwinana and Canningvale sites from retailer Shell Energy from mid-2022. Avertas is a venture between Macquarie Capital and fund management company DIF, while Acciona, Keppel Seghers and Veolia are also involved in the $700 million waste-to-energy project.
The gases company, which is owned by Linde, said the deal will help it support the efforts by Australa’s largest food and drink manufacturers and other manufacturers to decarbonise their operations. It will buy enough renewable energy certificates to ensure that all the carbon dioxide and liquid nitrogen it supplies to the food and beverage sector can by produced by 100 per cent renewable energy starting from 2023.
At Carnarvon, Mr Cook said Carnarvon and Frontier ultimately envisage a number of similar renewable diesel plants across the state At this stage, the explorer has committed to invest $2.6 million in seed capital to take the first project through to financial close, which is targeted for early 2022. Carnarvon expects to source external capital and green funding for the project.
“There is a clear link between the delivery of our core projects, securing carbon offsets for these through this venture and producing valuable products such as renewable diesel,” Mr Cook said.
The first plant would produce about 19 million litres a year of renewable diesel, at a site likely to be in WA’s south-west.
Meanwhile a separate multi-year power purchase agreement was signed by Marubeni Corporation’s SmartestEnergy Australia subsidiary, which will purchase the output from more than 30 community-based solar farms across Victoria and NSW held by Providence Asset Group.
Providence said it also plans to deploy green hydrogen energy storage and production units at the solar farms.
Extracted from AFR