It was recently announced that Block Energy signed an MoU with JSC Rustavi Azot, who are a subsidiary or Indorama Corporation, which is a leading chemical company in Asia. The purpose of this agreement, is for the companies to develop a new CCS opportunity within Block’s Patardzeuli-Samgori Middle Eocene reservoir.

The terms of this agreement state that the MoU is non-exclusive, it has a duration of one year from its commencement, the 7th of May 2024 and it is possible to extend the deal through mutual agreement.

The first steps, defined by lock and Rustavi Azot will be to form joint technical and commercial teams, which will enable the companies to start creating a pilot carbon dioxide injection project. Once this is complete, the companies will share and exchange commercial and economic information, which will help them to determine an optimal monetisation scheme.

This current project is a further development to a previously established study by Oilfield Production Consultants Ltd.

Block Energy and Rustavi Azot working on this project together will be extremely beneficial for both companies, especially for Rustavi Azot, as this company is one of the largest gas consumers in Georgia and they export their products internationally, including to the EU and member states. They have high gas consumption and export to these many places, due to the materials they work with, including fertilisers, chemicals and textiles.

The reason why both companies are looking to turn the Patardzeuli-Samgori reservoir into a functioning CO2 storage space, is because the area is geologically optimal and the OPC study suggests that it is accessible to proven sequestration technology. Furthermore, this reservoir’s proximity to the Rustavi Azot facility provides optimal conditions for one of the lowest cost carbon sequestration projects in Europe. An added benefit, is that this excellent project supports both companies’ dedication to sustainability, which has been a long-term commitment for both of them for a while.

Professor Eric Oelkers, a leading expert in the field of water-rock interactions, led the study and concluded that, ‘the Patardzeuli-Samgori Middle Eocene is suitable for the application of similar sequestration technology currently being used by Carbfix in Iceland, in which dissolved CO2 is mineralised into naturally reactive minerals within volcanic reservoir sequences.’ This technique was partly developed by Professor Oelkers, when they were co-founder of CarbFix, and it has the advantage of rapid and permanent sequestration with minimal risk of leakage.

Block Energy Chief Executive Officer, Paul Haywood, commented, "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 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."