LONDON: Block Energy plc, a prominent player in the development and production sector in Georgia, has joined forces with JSC Rustavi Azot, a subsidiary of the esteemed Indorama Corporation Pte Ltd. The collaboration is set to explore the potential of a Carbon Capture and Storage (CCS) project within the prolific Patardzeuli-Samgori Middle Eocene reservoir.

The Memorandum of Understanding (MoU), which is non-exclusive and valid for one year starting from May 7, 2024, with the possibility of extension, marks a significant step towards sustainable development. The two companies will establish joint technical and commercial teams to define a pilot CO2 injection project, sharing vital commercial and economic data to devise an effective monetization strategy.

This initiative builds upon a comprehensive study conducted by Oilfield Production Consultants Ltd (OPC), which revealed the reservoir’s CO2 storage capacity to be among the highest in Europe. The findings estimate the reservoir’s potential at a staggering 256 million metric tonnes, capable of counterbalancing the yearly emissions of 55 million vehicles. On a larger scale, the basin could store up to 8.7 gigatonnes of CO2, offsetting Turkey’s emissions for two decades.

Professor Eric Oelkers, a renowned expert in water-rock interactions and co-founder of CarbFix, led the study. His research supports the suitability of the Patardzeuli-Samgori Middle Eocene for the application of advanced sequestration technology, akin to that employed by Carbfix in Iceland. This method involves the mineralization of dissolved CO2 into reactive minerals within volcanic reservoir sequences, ensuring rapid, permanent sequestration with minimal leakage risk.

Rustavi Azot, a pivotal nitrogen fertilizer and industrial chemicals manufacturer in Georgia and part of Indorama Corporation, is strategically located near Block’s licenses in Rustavi. As one of Georgia’s largest gas consumers and an exporter to EU member states, Rustavi Azot’s partnership with Block Energy is poised to leverage the reservoir’s optimal geology and proximity to create one of Europe’s most cost-effective carbon sequestration projects. This venture underscores both entities’ dedication to long-term sustainability and environmental stewardship.

Commenting, Paul Haywood, Block Energy Chief Executive Officer said: “We’re delighted to enter into an MoU with Rustavi Azot, and now look forward to forming technical and commercial teams to progress this highly prospective CCS project.

With EU Emissions Trading Scheme (“ETS”) prices at around USD 60/ton, the agreement is a significant step forward to developing a commercial pathway toward project development. With upstream and downstream synergies critical for any CCS project, brownfield infrastructure available for re-use, and the conditions for low-cost proven technology, we are excited to see this project develop and look forward to updating shareholders in due course.”

Commenting, Mr. Jay Prakash Jajoo, General Director of JSC Rustavi Azot said: “Indorama is pleased to enter into this MoU with Block Energy to pilot CCS. We are excited to serve our key markets with products having lower CO2 footprints in our commitment towards reducing carbon emissions.”