CASE STUDY
EXPERT DUE DILIGENCE OF CO2 STORAGE SITE
LEADS TO NEXT STEP AT WORLD’S FIRST TOTAL
BLUE HYDROGEN SUPPLY CHAIN PROJECT
Project Highlights
Client: Sumitomo Corporation
Project Introduction:
Location: Australia and Japan
A group of major Australian and Japanese energy companies
joined forces to form the Hydrogen Energy Supply Chain
(HESC) consortium which develops the world’s first
completely integrated Blue Hydrogen supply chain project.
Project Goal:
liquefied hydrogen can be produced
commercially for safe export overseas
and be of strategic significance
The pilot of the project was successfully completed in 2022.
During its duration, the aim was to demonstrate the viability of
hydrogen gas production via the gasification of Latrobe Valley
coal, transport it to the Port of Hastings for liquefaction and
then undertake the shipment to Japan aboard the world’s first
purpose-built liquefied hydrogen carrier Suiso Frontier.
The successful capture of CO2 during the hydrogen
production and its storage in rocks 1.5km beneath the Bass
Strait is essential to the full commercialisation of the blue
hydrogen production. The Victorian and Commonwealth
Governments in Australia are involved in the project through
CarbonNet Project which AGR assisted on drilling the project’s
first CO2 storage well.
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Client challenge
Our solution
Sumitomo Corporation, acting on behalf of the
participating partners in HESC, approached AGR
to evaluate the challenges of achieving ‘safe’ and
‘stable’ sequestration of 125Mt / 5Mtpa-CO2 at the
carbon capture and supply site, which is critical to
the project.
The team sourced and selected by AGR for the assignment worked
with the technical documentation in the CarbonNet data room.
Additionally, CarbonNet presented the work they had performed to
evaluate the storage site and the potential injection wells.
This was a critical evaluation in the complex fitting
together of so many interdependent parts of the
project. The carbon capture and storage part
of the equation demanded the most rigorous
investigation, conducted by a world-class team
expert in a range of skills.
AGR team’s assessment covered:
• CCS qualification for the site
• CO2 site storage characterisation, produced by a simulation
model of the injection indicating the movement of CO2
• A geological evaluation of parameter distribution of the reservoir
• Tectonic risk analysis
• An evaluation of dynamic reservoir parameters, their distribution
in the reservoir and resulting distribution of CO2 in the period of
injection and thereafter
• An analysis of the risk of leakage from the reservoir
and old wells in the area
The significance and uniqueness of the project
The successful pilot project demonstrated that liquefied hydrogen can be produced commercially for safe
export overseas and be of strategic significance for both Australia and Japan.
Australia will receive a major boost to its ambition to become a key player in the global hydrogen economy.
At a potential future scale of 225,000 tonnes per year, the HESC Project has the potential to reduce global
CO2 emissions by 1.8 million tonnes/year, equivalent to taking approximately 350,000 petrol engine cars off
the road and create about 1,000 jobs per year in Victoria.
The new supply chain will also make a significant contribution to Japan in meeting its target
of net-zero carbon emissions by 2050.
Our recommendations
The findings from our rigorous due diligence process were listed
in a risk register. Sumitomo Corporation was given clear advice
on the positive and negative sides of the storage project and an
overview of the total storage potential in the area. These were
based on rigorous scientific evaluation, carried out by experts,
whose investigations could be trusted.
The client was armed with clear independent feedback
to provide to HESC and CarbonNet on issues to address
for the development project to progress.
E: selectagr@agr.com
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