BP, Rio Cancel $2 Billion Australian (clean-coal) Project

[phantom power]

May 12 (Bloomberg) -- Rio Tinto Group, the world's third- largest mining company, and BP Plc, Europe's second-largest oil producer, canceled a plan to build a coal-fired power plant in Australia that would capture and store carbon to cut emissions.

The plant at Kwinana, which was being studied by the Hydrogen Energy joint venture between Rio and BP, won't be built after it was found that rock formations wouldn't seal in carbon dioxide, said Rio spokesman Nick Cobban. The project would have required $1.5 billion to $2 billion in investment, according to the venture's estimates.

``We don't understand as fully as other formations'' the proposed reservoir, David Nicholas, a London-based spokesman at BP, said today by telephone. ``Particularly considering this would be one of the first projects of its kind, we would want some very high level of certainty of the long-term storage of CO2.''

http://www.bloomberg.com/apps/news?pid=20601081&sid=ag.zXqGzi22g&refer=australia