Coalition climate policy and practical emissions reductions

Turrum, tuna and kipper fishing

The project described below is preparing to separate 800,000 tonnes of carbon dioxide a year from natural gas.

• To release this carbon dioxide into the atmosphere with a carbon tax of $23 per tonne will cost $18.4 million a year.
• Under the Coalition's Direct Action policy to release this carbon dioxide into the atmosphere will cost nothing.

There are commercial options that are in addition to these political choices to influence carbon dioxide emissions. The cost of the first option and the value of the second and third options are only estimates for the purposes of illustration:

• Pay $10 per tonne - for a total expenditure of $8 million a year - to return the carbon dioxide into one of the gas reservoirs in the Bass Strait oil and gas fields.
• Sell the carbon dioxide for $5 per tonne - for a total revenue of $4 million a year - for algae farming that uses it as a nutrient to produce bio-diesel fuel and cattle fodder.
• Sell the carbon dioxide for $10 per tonne - for a total revenue of $8 million a year - for SolarGas production from methane and carbon dioxide used as fuel in a combined-cycle gas turbine power station. (Methane to produce 2,400 GWh a year can be converted to SolarGas with 800,000 tonnes of carbon dioxide to produce 3,200 GWh a year from the same power station.)

In Bass Strait the Esso-operated Kipper Tuna Turrum Project is currently one of the largest domestic gas developments on Australia's eastern seaboard. Over the past few years more than 60 kilometres of subsea pipelines, a new offshore platform (Marlin B) and subsea equipment above the Kipper field have been installed. Hook-up and commissioning work is underway to prepare these facilities for operation.

The oil and gas plants at Longford, 20 kilometres from Sale in East Gippsland are the receiving point for oil and gas produced in Bass Strait. They have been operating for more than 40 years and were designed to treat gas from fields developed as part of the original Gippsland operations to meet industry specifications for natural gas product.

Esso's Kipper Tuna Turrum Project, Bass Strait

These existing facilities are not able to process gas with the carbon dioxide content of some of the new fields and this is why a Gas Conditioning Plant is now needed.

The Longford Gas Conditioning Plant will not increase the capacity of the existing Longford Plants. Rather, the new facilities will remove carbon dioxide and mercury from the new sources of gas thus enabling processing by the existing Longford Gas Plants. The technology to be used for carbon dioxide and mercury removal is proven, reliable and commonly used around the world, including other parts of Victoria.

The Longford Gas Conditioning Plant is designed to process approximately 11 million cubic metres per day of gas containing up to 15 percent carbon dioxide. The amount of greenhouse gas to be emitted each year by the Gas Conditioning Plant will include about 800,000 tonnes of carbon dioxide separated from the gas.