An important step was announced today after BP signed a non-binding agreement which could lead to BP investing $20 million to support the project.

This non-binding agreement is subject to a final investment decision targeted for the end of the year.

Santos has entered front end engineering design for the Moomba CCS project.

More than a decade ago, Santos unveiled plans to use its pipeline network and depleted reservoirs at Moomba to take carbon dioxide from Queensland, New South Wales and South Australia.

Success of the project could have implications for the NT's own onshore gas industry, should it develop, because of high greenhouse gas emissions and the lack of a plan to deal with them.

Santos is heavily involved in the development of the NT's offshore and onshore gas fields.

The Moomba project proposes to capture the 1.7 million tonnes of carbon dioxide currently separated from natural gas at the Moomba gas processing plant each year.

It would then reinject the carbon dioxide into the same geological formations where it was extracted from.

Santos chief executive officer Kevin Gallagher said the non-binding agreement between Santos and BP is a big vote of confidence in Santos' proposal to capture carbon dioxide from the Moomba plant and safely and permanently store it in geological formations of the Cooper Basin.

It also creates opportunities for CCS-related knowledge sharing from BP's global operations.

"We welcome this agreement with BP that brings the Moomba CCS project closer to fruition," Mr Gallagher said.

"We estimate the cost of this abatement at less than A$30 per tonne and our aim is to drive these costs lower with scale and experience.

"Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen.

"Santos' Moomba CCS project is an important first step.

"With the Cooper Basin's reinjection capacity assessed at up to 20 million tonnes of carbon dioxide per year for 50 years, it has the potential to be a large-scale carbon sink for power generators and other industries in eastern and southern Australia.

"Today, CCS projects globally store around 40 million tonnes per year of carbon dioxide, far short of the more than two billion tonnes of carbon dioxide the International Energy Agency forecasts that CCS projects will need to store each year by 2040 if the world is to meet its climate aspirations.

"Just as private investment in renewable energy deployment was accelerated through public policy and funding over the last two decades, we now need to focus on accelerating CCS in similar ways to achieve the scale and experience that will not only drive costs down but will also deliver real scale when it comes to emissions reduction.

"I am very pleased to see the Australian Government recognising the importance of carbon capture and storage, and moving forward with a Technology Investment Roadmap that will include pathways to support development and deployment of CCS.

"A revenue stream, such as from Australian Carbon Credit Units, will be a critical enabler for our Moomba CCS project," Mr Gallagher said.

BP's managing director exploration and production Emil Ismayilov said BP believes CCS has an important role to play in meeting the objectives of the Paris Agreement.

"It can achieve deep emissions reductions in existing power infrastructure and energy-intensive industries that rely on the use of fossil fuels."

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