INTERVIEW: Chevron sees Asia-Pacific as 'critical region' for CCS, hydrogen, ammonia

Chevron sees fresh momentum for the carbon capture and storage, hydrogen and ammonia businesses in the Asia-Pacific region and a long-standing customer base for its oil and gas businesses, with its division exploring new energy businesses with regional partners, a company executive told S&P Global Commodity Insights.

"I think [when it comes to] CCS in Asia, perhaps globally, but specifically in Asia, we are certainly seeing momentum," Srimonto Ghosh, vice president of origination & customer solutions at Chevron New Energies, said in an interview on the sidelines of the Japan Energy Summit & Exhibition in Tokyo June 4.

In addition to its operating Gorgon CCS project in Australia, Ghosh said there were projects being developed by other parties in Malaysia, and Indonesia with Jakarta "defining more clarity on how they would look at trans-border opportunities."

Describing CCS developments as still being at an early stage, Ghosh said that CCS is "a critical enabler of net zero" and there is market intent in Asia.

"But cost-effectiveness is a challenge. So the question is, how do we bridge to cost-effective CCS solution and scale?" Ghosh said.

"The state of play is positive and has momentum but we still have a journey to really deploy at scale," he said.

Chevron sees the Asia-Pacific region as "a very critical region" for CCS, hydrogen and ammonia businesses.

"Australia is an anchor for CCUS because I think it has great geology and an enabling policy to support," Ghosh said.

"And we see key markets on the emission side in Japan and [South] Korea, possibly Singapore and in Taiwan, but certainly Japan and Korea, and Indonesia being sort of the other [location for] supply or sequestration."

Gorgon CCS

Referring to its Gorgon CCS project, which started operation in 2019, Ghosh said: "We are sequestrating about 1.6 million mt per annum [of CO2] ... like any large project or any innovation that we do at scale, we do believe that there are some operational complexities that we need to work through."

"We are not achieving nameplate capacity because of some reservoir water pressure, water pressure management issues that we are actively working on," he said. "So I think that perhaps will unlock some further capacity as we work through that."

"But I think as a project, there are a lot of learnings from the project while it's operating and we are working [on] it every day, it's sequestrating carbon dioxide every day," he said.

"We've been also learning that we're sharing with the rest of the enterprise because that allows us to then take those learnings as we look at other projects in Australia, potentially Indonesia and back in the US," he added.

Indonesia is currently working to develop itself into a CCS hub following the implementation of CCS regulations in the country after a presidential decree in January, according to the minister of energy and mineral resources Arifin Tasrif.

Australia, Southeast Asia

Commenting on its memorandum of understanding signed with JX Nippon Oil & Gas Exploration in March to consider developing a CCS project, Ghosh said it was "natural" to extend its long-standing partnership with JX Nippon in the E&P business in Southeast Asia.

With JX Nippon's upstream expertise as well as its affiliation with ENEOS, which is among the largest emitters in Japan, Ghosh said the companies will look at developing a CCS value chain that aggregates CO2 and transports it to "some sequestrating regions like Australia and ... Southeast Asia, potentially like Indonesia."

"So we are doing it as a feasibility study, as a study to understand the value chain and the elements of what it takes on the capture, on the transportation side," he said.

Ghosh said during the first phase, "I think the intent is to look at some of the new leases that we are part of, and we continue to look at new opportunities or blocks with the Australian government ... releasing [in offshore Australia]. So we are partly looking at participating and evaluating them."

With Japan's Mitsui O.S.K. Lines, Chevron is also in the middle of carrying out a techno-economic feasibility study on transporting liquefied CO2 from Singapore to Australia, Ghosh said.

Ghosh added that Chevron is also looking at "multiple ways of collaboration" with JERA, its long-time customer as well as partner for LNG.

"We are the largest supplier to them. So we're looking at expanding in the new energy space. So it's an area that looks at CCS collaboration, both in Japan and in the US," he said.

"It's kind of a value chain and where we can -- JERA and Chevron -- [we] work together in the value chains between Japan and the US in the CCS value chain, in the hydrogen ammonia value chain, primarily those two," Ghosh added.