1
CO2 Based EOR Projects – Potential, Difficulties and Opportunities
Presentation by
Hugh Sharman, DirectorIN-CO2 ApS, Denmark
Carbon Capture and Storage, CO2 for Enhanced Oil Recovery and Gas Flaring Reduction
8th – 9th June, 2004OPEC Secretariat, Vienna
www.inco2.com IN-CO2 ApS, Denmark
OPEC - Sailing into the Storm We would not have this picture had the tanker not sailed through
2
OPEC and Kyoto
To a recent search engine question ”OPEC and Kyoto”, AltaVista found 15,621 resultsGoogle found 36,000Yahoo found 207,000
All those I read were negative about OPEC
3
Demand growth is relentless
4
Watch ChinaChina, Production & Consumption,
Million t/y
-
50
100
150
200
250
300
350
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Production Consumption
Now watch India!
5
Recent exploration performance has been poor – 200 billion bbls added
1
10
100
1900 1925 1950 1975 2000 2025
bill
bbl
Production
Exploration
Extrapolation (bbl/NFW)
1
10
100
1900 1925 1950 1975 2000 2025
bill
bbl
Production
Exploration
Extrapolation (bbl/NFW)
Leif Magne Meling
With 100 bill bbl for frontier basins gives a total of 300 bill bbl
0
20
40
60
80
100
120
1980 1990 2000 2010 2020 2030
Mill
ion
BO
PD
History Natural declineProduction improvement IORNew field development Exploration
...so demand must mostly met from good reservoir management
Reserve growth; IOR and EOR
Exploration success
Demand growth
New field developments
Leif Magne Meling
Production efficiency
Natural decline “as is”
Evaluation of history, IHS
data base7
....and global CO2 emissions seem to cause much bother
While there is an international consensus that climate is being altered by excessive emissions of human caused CO2…
…oil producers are squeezed by pressures to reduce oil prices and receive an unreasonable share of the blame for “global warming”
8
CO2 is on already on OPEC’s Horizon
“I believe there is enough technology to sequester CO2and to take CO2
out of the atmosphere.”
5th April, 2004 9
Let’s turn these ”problems” into“opportunities”
The Peak Oil & Climate Change Debates:
- Increasing consumption of fossil fuels
- Increasing emissions of GHGs
CO2 is an effective and widely accepted gas for EOR
the technologies exist and the economics for stripping CO2
from industrial and power plants are there already
There are big advantages for a CO2 infrastructure
Inter-statal agreements & other conditions for finance
bring peace
And EOR can pay a crucial role in setting oil price
10
Which gas for tertiary oil recovery?Gas floods, usually with HC gases, start after the water flood returns unacceptably high water cutHC-gas floods are still being planned but......gas supplies are under pressure and......HC-gas, landed USA, Japan or Europe is now more valuable than crude oil...so HC gas is no longer the automatic gas of choice...and is any way needed for producing countries’ industry feedstock.....resulting in CO2, an excellent gas for tertiary productionProducers should benefit from international emissions trading for permanently sequestering CO2.
CO2 will be the ideal gas of choice for future tertiary production.
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CO2 is already in wide-spread use
NorthDakota
Wyoming
Colorado
Arizona Oklahoma
Louisiana
MississippiBravoDome
Texas
NewMexico
McElmoDome
St. JohnDome
Sheep Montain
JacksonDome
Gas Plants
AmmoniaPlant
Coal Gasification
CO2-Sources
Natural
Industrial
Pipelines
California
LaBarge
Utah
PermianBasin
Industrial sources have always been important
73 CO2-miscible floods, 2004USA & Canada (OGJ)
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US EOR, Which Method?US EOR PRODUCTION
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
b/d
Thermal Chemical Gas
Production fromgas is increasing
Steam assisted EOR is in decline
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Which Gas?CO2 is increasingly the gas of choice
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
1996 1998 2000 2002 2004
b/d
HC Gas CO2 miscible Nitrogen
Relative Gas Use in USA EOR, 2004
Nitrogen5%
CO2 miscible64%
HC Gas31%
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CO2 used Globally for EOR will ....1. …increase oilfield recovery by 6 – 15% of OOIP 2. …and global recoverable reserves 3. …while delaying the pending oil and gas production
peaks,4. …extending the oil and gas production plateau,5. ….sequester CO2, safely and reliably6. Large scale CO2 use aligns the interests of
producers and consumers of crude oil and gas …7. …and reduces concerns regarding global warming
15
CO2 SourcesThere are some, outside USA, who say...
CO2 is ”too expensive”…or “not available”…or “too complicated”
Not true!Examples follow
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CO2-Source FacilitiesOnshore and Offshore Gas Separation
Oil and gas related CO2 is an obvious choice for EOR
Unocal have installed a reliable, membrane based, CO2
separation system to meet contractual gas production
requirements.
At Pailin Field, Thailand
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Elsam Kinder Morgan CENS Project
Capturing CO2 from coal power plants• CO2-Emission reduced by 90 %
• SO2-Emission capture is 99,9 %
• NOx-Emissions reduced by 5 %
• Cost of capture < $25 /tCO2
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Qatar Fertilizer Company
QAFCO - 4 project: the project includes an ammonia plant and a urea plant with daily capacities of 2000 and 3200 tons of ammonia and urea respectively. QAFCO's annual production capacity will be 2 million tons of ammonia and2,8 million tons of urea.
2 – 4 million tonnes pure CO2 per year
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6
Proven CO2 Recovery on Gas Turbine Exhaust;Bellingham Plant, USA - Aerial View
Proven CO2 Recovery on Gas Turbine Exhaust;Bellingham Plant, USA - Aerial View
CO2 is produced in the Middle EastNatural Gas Consumption & Corresponding CO2
Production in Middle East
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
mill
ion
t
Natural Gas CO2
Most CO2 from natural gas use can be captured and
used for EOR
Enough for > 2 billion barrels per year
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But why Build an Infrastucture?Examples show how CO2 use
and oil production at......Weyburn, Canada...SACROC, Texas..rises, plateaus then falls..as use in one field falls, ...it increases at new floods...in new fields
0
1 0 0 0
2 0 0 0
3 0 0 0
4 0 0 0
5 0 0 0
6 0 0 0
7 0 0 0
8 0 0 0
jan.
54
jan.
58
jan.
62
jan.
66
jan.
70
jan.
74
jan.
78
jan.
82
jan.
86
jan.
90
jan.
94
jan.
98
jan.
02
jan.
06
jan.
10
jan.
14
jan.
18
jan.
22
jan.
26
jan.
30
(m3/
day)
B a s e W a t e r f l o o d I n f i l l v e r t i c a l s H o r i z o n t a l s C O 2 E O R
0
5 0 , 0 0 0
1 0 0 , 0 0 0
1 5 0 , 0 0 0
2 0 0 , 0 0 0
2 5 0 , 0 0 0
J-50
J-54
J-58
J-62
J-66
J-70
J-74
J-78
J-82
J-86
J-90
J-94
J-98
J-02
J-06
J-10
B O P D
Dis
cove
ry
Prim
ary
Dep
letio
nW a t e r f l o o d C O 2 F l o o d I C O 2 F l o o d I I
Toda
y
Cen
terli
ne P
roje
cts
{
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Such infrastructures already exist
Permian RegionWest Texas
CO2 Company
Created by: SADavis August, 2001 File: CO2 Permian v1.ppt
McCamey
OdessaMidland
Lubbock
Hobbs
N E W M E X I C OT E X A S
Cortez Pipeline
Sheep Mtn
Bravo
Este
Canyo
n Ree
f Carr
iers
Central BasinCO2 PipelinesCO2 Projects
L E G E N D
W. Tex
as
PetroSource
Comanch
e Creek
Slau
ghter
Anton-Irish
Llano
Means
Adair
Wellman
Snyder
N
S
W E
At a large scale
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ExampleA ”Gulf” Infrastructure for CO2?
Why not?enormous amounts of abandoned oil lie in a significant number of abandoned and/or mature reservoirs,
conveniently clustered for a super-CO2infrastructure Oil & Gas Journal
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PROPOSED PROJECT IN NORTH SEA
StatfjordBrent
GullfaksNinian
Sleipner
Brae
Ekofisk
Forties
GraneBrage
BerylClaymoreClaymore
Piper
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• 30 – 40 million t/y buried CO2
•CO2 from power stations and factories around N. Sea basin
• 100 million bbl/y incremental oil
•Field life extended for 10 – 30 years
SPONSORS
Gullfaks has been studied in detail
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So has Ekofisk
Other, similar North Sea structures, like Forties & Brent, will respond just as well
CO2
The technology exists to do this at lower cost – even offshore!
Norsk Oliedirektorat
Sub-sea pipelines inject CO2 directly into the wells
Floating storage & production vessels reduce the capital cost of smaller floods
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All this costs serious money!The CENS model shows investment costs
of roughly
$1.7 billion for CO2 pipeline
$2.2 billion for CO2 capture plants
$5.0 billion for EOR investment in oilfields
About $ 10 billion29
So why has it not happened - yet?Brent Crude, $/bbl
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
This is what upstream companies remember!
They don’t trust this
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Financing Tertiary Recovery requires
Mostly - stable oil prices, no more nasty surprisesTransparent knowledge of reservoir conditions in target oil fieldsTreaties of cooperation between oil producing countriesContracts between oil producers and CO2 suppliersContracts between oil producing countries and Annex 1 countries
31
Oil Producers can benefit from Clean Development Mechanisms & Joint
Implementation with Annex 1 Countries
Annex 1 Countries
Sequestered CO2 will contribute towards major CO2 emission reductions in the years following 2005
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Developing a CO2 Infrastructure
Producers in the oil basin must recognise & pool their common interests,
1. ...preferably choose a common infrastructure developer...
2. ...whose interests are aligned with all producers...
3. ...and finds a total solution that produces the least cost incremental oil
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Preferred Infrastructure DeveloperShould understand all phases and aspects of oil production,...how to source low cost CO2,…mutually benefit the producers from the up-coming, international trade in CO2 reductions…while aligning its interests with all producers,…possibly sharing revenues from incremental oil
34
Why do it?
Developing a World-class infrastructure for CO2 will take decadesAnd cost many $billionsbut if started now, the oil plateau can be extended by decades...…and early developments at suitable sites could give early returns…such early developments can be the “hubs” of the long term infrastructure
35FINDING COSTZERO
1
10
100
1900 1925 1950 1975 2000 2025
bill
bbl
Production
Exploration
Extrapolation (bbl/NFW)
1
10
100
1900 1925 1950 1975 2000 2025
bill
bbl
Production
Exploration
Extrapolation (bbl/NFW)
