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CCS in the Middle East/North Africa: Opportunities, Challenges and Implications

Robin M. MillsGlobal Status of CCS

Abu Dhabi, November 2014

Photo source: Statoil/BP

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• Global CCS impacts– MENA countries have huge oil and gas resources– Without CCS, they will not be able to use/export much of these resources– Climate policy will increase demand for gas, and gas CCS will eventually be

required– ‘Border carbon tariffs’ are a threat to high-carbon MENA economies

• Impacts of CCS in MENA– Gas-fired power with CCS is cost-competitive with MENA’s other main power

generation options: nuclear and solar power– CCS may be important to protect high-carbon MENA exports

• Implications of MENA CCS for the world– MENA has great potential to implement CCS, particularly on gas-fired power

plants; and for EOR– However, more research & demonstration project collaboration needed

• Effects of successful use of CCS on MENA are complicated – both positive and negative

Implications of CCS for MENA economies

Importance of carbon capture & storage

Good for Middle East Bad for Middle East

Creates ‘carbon space’ for oil and gas exports

Supports continuing coal use

Potential for EOR in Middle East Potential for EOR outside Middle East

Can displace gas used for reinjection Can make high-carbon unconventional oil more acceptable (oil sands, coal-to-liquids)

Important to reduce carbon footprint of petrochemicals & gas-to-liquids plants

Reduces ‘carbon leakage’ effect

Reduces future CO2 mitigation costs

The size of the prize: >500 billion bbl for IOR in the Middle East?

Saudi Arabia

Iran

Iraq

United Arab Emirates

Kuwait

Qatar

0 100 200 300 400 500 600 700 800

Produced to 2008Reserves (IHS)Available for IORUnrecoverable

• Assumes long-term target of 70% recovery factor• Total CO2 demand 250 Gt

– 140 times Middle East’s 2010 emissions– However not all IOR/EOR is with CO2

– And a large part of CO2 will be recycled

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Differentiating CCS impacts

Yemen Abu Dhabi (Masdar City)

• Middle East & North Africa countries are not homogeneous• They vary in oil & gas reserves and production, economic development,

technological capability, carbon intensity, geography, etc• Large gas exporters (especially Qatar) will

– Lose in the short term if CCS permits expansion of coal power– Gain in the long-term as their large gas resources can be fully used

• Mature oil producers gain from CO2-EOR• Countries with clusters of CO2-emitting industries and short source-sink

distances have an advantage in CCS implementation

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Ranking of MENA countries by promise for CCS

Country Environmental commitment

Investment climate

CCS capability

CO2-EOR importance

CO2 capture potential

Transport Overall

UAE 1 1 2 1 2 3 1Qatar 3 3 8 3 1 4 2Bahrain 5 2 5 4 6 1 3Oman 2 4 3 2 8 5 3Algeria 6 7 1 5 5 11 5Saudi Arabia

7 6 4 10 3 6 6

Kuwait 8 9 5 9 9 2 7Egypt 4 5 9 8 7 10 8Libya 10 8 7 7 10 7 9Iran 9 11 10 6 4 9 10Iraq 11 10 11 11 11 8 11

Ranking is subjective

Drivers and blockers for MENA CCS

Drivers Blockers

Growing environmental awareness Environmental awareness still limited

Substantial oil & gas experience Limited CCS expertise

Large, low-cost EOR potential Larger producers do not need EOR yet

Replacement for gas used for pressure maintenance

National oil companies are technically conservative

CO2 storage in deserts/offshore, remote from habitation

Low, subsidised energy prices

Public acceptance of oil industry Limited institutional capability

Terrain straightforward for CCS pipelines (mostly flat desert)

(In some countries) conflict and international sanctions

Ample storage space General global issues: lack of carbon price; technological uncertainty; high cost

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Robin Mills

Manaar Energy Consulting,

Dubai, United Arab Emirates

robin.mills@manaarco.com

www.manaarco.com

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