CO2 Capture and Geological Storage

Demonstration at In Salah, Algeria

Iain Wright (CO2 Project Manager, BP Group Technology)

UNCTAD Africa Oil & Gas Conference April 4th 2006

Agenda

• Impacts of Climate Change

• CO2 Capture & Storage Technology

– Global Potential

– Deployment Costs

– Starting the Hydrogen Economy

• Focus on the In Salah Project

• Summary

Impacts of Climate Change: Rainfall Change by 2100

Increase

Decrease

Technology Options for GHG Stabilization

The Stabilisation Wedge

Emission trajectory to achieve 500ppm

Emission trajectory BAU

1 GtC Slices of the Stabilisation Wedge

0

200

400

600

800

1000

1200

1400

1600

OnshoreWind

Hydrogenfor Power

(C&S)

Nuclear OffshoreWind

Wave Solar PV HybridVehicles

Biofuels Hydrogenfor Tpt.

CO2 Reduction Options ($/te)

Source: European Commission Report (Jan 2004) , DoT, DTi (2003) , BP Analysis

CO

2 r

educt

ion c

ost

s ($

/tC

O2)

Power Generation

(Fixed Sources)

Transport

(Mobile)

• Cost of CO2 mitigation (above today’s economics)

CCS Technology Maturity

CO2 Capture

Post-Combustion

Pre-Combustion (Hydrogen)

• Oxyfuels

• $40-100+/Tonne CO2

Geological StorageEnhanced Oil Recovery

Saline Aquifer Formations

Depleted Oil/Gas Reservoirs

• Enhanced Coal Bed Methane

High Purity Sources

Amines, Membranes, H2

Most of the elements required for CO2 Capture & Storage (CCS) are already deployed at commercial scale, but integration for GHG mitigation is not happening due to the high cost and lack of policy framework

Transport Pipelines

Ships

• Depends on distance

When will CCS be Deployed?

$/TCO2

CCS Costs CCS Benefits

Hi Purity CO2

EOR/Storage

$100

EU ETS, CDM, JI $10-25 2008, 2012?

2006

When is Crossover??

Widespread Deployment

EOR/EGR

Time

Creating Value for CCS

• UN IPCC CCS Special Report: CCS is now recognised as a GHG mitigation technology. Subject to:

– Long-term Storage Assurance

– Regulatory Framework

• EU Emissions Trading Scheme (Linking Directive) will allow geological storage. Subject to:

– Long-term Storage Assurance

– Regulatory Framework

• In Salah is a world-class CCS project that can develop:

– Long-term Storage Assurance

– Regulatory Framework

ETS CO2 Prices (€)

CCS 2006: Key Challenges

1. Reducing the Costs– Mainly Capture, Capital cost and Efficiency

– Target: $20-30/t CO2

2. Public and Regulatory Acceptance that Geological Storage is Safe and Effective:– Storage Integrity & Leakage: Public/NGO

acceptance

– Governments: Legal & Regulatory

3. Securing Commercial Value • Develop Commercial Incentives

– Market Eligibility (CDM,ETS)

}}

In Salah CO2 JIP

Focus on In Salah (Algeria)

• Industrial Scale Demonstration of CO2 Geological Storage (Conventional Capture)

• Started Storage in August 2004

• 1mmtpa CO2 Stored (17mm tonnes total)

• $100mm Incremental Cost

– No Commercial Benefit

• Test-bed for CO2 Monitoring Technologies

In Salah 2004 (Three Projects)

• In Salah Project(s) Overview

– In Salah Gas Development (1bcf/d $2,000 million)

– In Salah CO2 Storage (1mmtpa $ 100 million)

– In Salah CO2 Assurance R&D (CSLF, EU) $ 30 million)

1. In Salah Commercial Project

– In Salah Gas Development

•(1bcf/d $2,000 million)

Krechba

Teg

Reg

Garet elBefinat Hassi Moumene

In SalahGour Mahmoud

Proposed ISG P ipeline

R EB

Hassi B irRekaiz

H assi Messaoud

H assi R ’Mel

Tiguentourine (BP)

02151093

Algiers

Tangiers

Lisbon

Cordoba

Cartagena

M O R O C C O

A L G E R I A

S P A I N

L I B Y A

MAURITANIA M A L I

SkikdaTunis

N I G E R

In Salah Gas Project

Krechba

Tegentour

Reg

Garet elBefinat

HassiMoumene

HassiR’Mel

In SalahGourMahmoud

48” 455km

38” 60km

24” 13km

24” 62km

Krechba

Tegentour

Reg

Garet elBefinat

HassiMoumene

HassiR’Mel

In SalahGourMahmoud

48” 455km

38” 60km

24” 13km

24” 62km

5-10% CO2

<0.3% CO2

The In Salah Gas Project

In Salah Gas Processing Plant

Import Gas Pipeline from Teguentour and Reg

Export Gas Pipeline to Hassi R’Mel & Europe

(1 BCF/d)

CO2 Storage Pipeline to Krechba

2. In Salah CO2 Storage

– In Salah CO2 Storage

•1mmtpa $100 million

•No Commercial Benefit

In Salah 25 Year CO2 Profile

Chart 1 - Process Facilities CO2 Emissions by Source - Without CO2 Re-Injection Scheme

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year

Tonn

es

Venting - Without CO2 Re-Injection

Venting - Storage Tanks

Flaring - Process

Fugitives - Process

Combustion - Emergency Power

Combustion - Compression

Combustion - Power Generation

Combustion - Process Heat

• Only the separated (yellow) CO2 will be stored – the combustion CO2 (blue) will be vented

Carboniferous Reservoir ~20 metres thick

Carboniferous Mudstones ~950 metres thick

Cretaceous Sandstones & Mudstones ~900 metres thick (Regional Aquifer) 4 Gas

Production Wells

3 CO2

Injection Wells

Processing Facilities

Amine CO2 Removal

The CO2 Storage Scheme at Krechba

Carboniferous Reservoir ~20 metres thick

Carboniferous Mudstones ~950 metres thick

Cretaceous Sandstones & Mudstones ~900 metres thick (Regional Aquifer) 4 Gas

Production Wells

3 CO2

Injection Wells

Processing Facilities

Amine CO2 Removal

The CO2 Storage Scheme at Krechba

Carboniferous Reservoir ~20 metres thick

Carboniferous Mudstones ~950 metres thick

Cretaceous Sandstones & Mudstones ~900 metres thick (Regional Aquifer) 4 Gas

Production Wells

3 CO2

Injection Wells

Processing Facilities

Amine CO2 Removal

Carboniferous Reservoir ~20 metres thick

Carboniferous Mudstones ~950 metres thick

Cretaceous Sandstones & Mudstones ~900 metres thick (Regional Aquifer) 4 Gas

Production Wells

3 CO2

Injection Wells

Processing Facilities

Amine CO2 Removal

Carboniferous Reservoir ~20 metres thick

Carboniferous Mudstones ~950 metres thick

Cretaceous Sandstones & Mudstones ~900 metres thick (Regional Aquifer) 4 Gas

Production Wells

3 CO2

Injection Wells

Processing Facilities

Amine CO2 Removal

The CO2 Storage Scheme at Krechba

In Salah CO2 Storage Operation

CO2 Storage Infrastructure

50mmscf/d CO2

(1mmtpa)

Compression

Transportation

Injection

Storage

Krechba 501

Pilot hole plus 1250 metres of horizontal

section

3. In Salah CO2 Assurance

– In Salah CO2 Assurance

• R&D (CSLF EU $30 million)

•Joint Industry Project (JIP)

•Could provide a commercial return for CO2 storage

Joint Industry Project Objectives

1. Provide assurance that secure geological storage of CO2 can be cost-effectively verified and that long-term assurance can be provided by short-term monitoring.

2. Demonstrate to stakeholders that industrial-scale geological storage of CO2 is a viable GHG mitigation option.

3. Set precedents for the regulation and verification of the geological storage of CO2, allowing eligibility for GHG credits

K b-C B

Kb -C A

Sph e ro id : C lark e 1 88 0P ro jec tion : U TM Zo ne 3 1 ND a tum : N S a hara 1 959

F irs t G as D e ve lop m en t W e ll Lo ca t io ns

C O 2 In je c tio n W e ll

P ro d uc tion W e ll

0 5000M eters

A ppra isa l W e ll L oca tio n s

K b -7

K b -10

Kb-C C

K b-6

K b-CE

K b-501

K b-1

K b-503K b-502

K b-5

K b -9z

K b-8K b -4

K b-2

Kb-1

G as-Water C ontact

1330 m etres belo w Mean S ea L evel~1800 m etres below G round L evel

Fu ll G a s C o lum n

4 2 0 000 43 0 0 00

32 10 00 0

32 20 00 0

3 23 0 000

Kb-503

Kb-501

Kb-11

Kb-14

Kb-12

Kb-13

Kb-502

Option for Permanent Seismic

Pre-cursor 3D

Summary

• CCS can make a major contribution to GHG reduction

– Application to all hydrocarbons (coal, oil, gas)

– Breaks the link between hydrocarbons and GHG

– Application to many sectors (power, cement, steel)

– Cost-comparable to other low-carbon options

– Enables GHG-free hydrogen from hydrocarbons

• Widespread deployment requires long-term, supportive Policy Frameworks

• Algeria is leading the way !