Australian Mining Giant Sells Dubai CCS Project to BP
Rio Tinto's Kestrel coal mine in Australia
Rio Tinto, the Anglo-Australian mining giant, is selling its 50 percent stake in carbon capture and storage (CCS) project in Dubai to BP and will instead invest in the Hydrogen Energy California (HECA) CCS test project.
Rio Tinto says that as a miner, it makes more sense to invest in the coal-backed California initiative rather than Dubai’s Hydrogen Energy International (HEIL) project, which uses natural gas as a feedstock.
Coal is significantly cheaper than natural gas and also less prone to erratic price swings, which makes it a more manageable feedstock.
Standard practice: BP and Rio Tinto did not disclose the financial terms. Masdar, the Abu Dhabi clean tech investment group, controls the balance of the HEIL project.
In a prepared statement, Preston Chiaro, group executive, Technology & Innovation at Rio Tinto said:
Rio Tinto prefers to focus on projects with solid fuel feedstocks, which are better aligned with our other businesses.
It’s not a total split as BP is also a partner on Hydrogen Energy, located in Central California’s Kern County. Once fully operational the project seeks to cut the plant’s emisssion by 90 percent, by trapping the CO2 output and storing it deep underground.
We’ve said it before, while there’re a number of CCS initiatives across the country, the technology is unproven and chances of ever going commercial dim.
Companies like, BP or Rio Tinto or AEP are all supporting CCS projects but they’re all doing it with the help of the government, which has earmarked $3.5 billion from the $787 billion stimulus for CCS research.
Photo Credit: Rio Tinto
