Unlocking North Sea CO2 Storage for Europe

Hans Aksel Haugen, Tel-Tek. Edinburgh 12 September 2013

The role of shipping and FPSOs in offshore injection

Ship based CCS chain

CO2 source Liquefaction Intermediate

storage

Loading Pre

treatment / Unloading

Injection for EOR

Onshore Hub Pipeline

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Ship based CO2 transportation alternatives

•  Ships carrying liquiefied CO2

–  Industrial experience exists •  Barges •  Ships carrying compressed CO2

– No existing practical experience

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Transportation of food grade CO2

M/T Yara Gas III alongside the quay near Yara’s ammonia plant in Porsgrunn, Norway. Capacity: 1200 tons of liquiefied CO2 in 2 tanks of 600 tons capacity each Ship type: Converted container vessel

Photo: Larvik Shipping 4

Ship size and installations on land

•  Optimal size of ship vary with transporting distance and CO2 volume – 10000 – 50000 tons of cargo?

•  CO2 to be liquiefied (7 barg, -50˚C, <50 ppm H2O)

•  Need of intermediate storage tanks, capacity about +50% of ship

•  Need of loading facilities

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Yara’s CO2 import terminal in Montoir-de-Bretagne, France

CO2 storage tanks 2 * 450 tons 50 meters * 5 m diameter 300 m pipeline to quay

Photo: Yara 6

CO2-transportation, ships vs. pipelines Pipelines

Ships

+ - + - Low Opex High Capex Low Capex

High Opex

Onshore needs: Compression

Relatively low flexibility

Large flexibility (volume and route)

Onshore need for intermediate storage and liquefaction plants

Can be built both onshore and offshore

Low potential for re-use

Re-use potential

Large sunk cost Lower sunk cost

Short delivery time (2 years ?)

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Ship based CCS chain

CO2 source Liquefaction Intermediate

storage

Loading Pre

treatment / Unloading

Injection for EOR

Onshore Hub Pipeline

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Combination of ships and pipelines: An example from the Skagerrak area

Emission SourcesHub locationStorage location Pipeline networkShip transport route

Norway

Sweden

Denmark

Skagerrak

Kattegat

0 55 km

Oslo

Kristiansand

Grenland

Tønsberg

Halden

Lysekil

Stenungsund

Gӧteborg

VӓrӧAalborg

© map: Mareano 9

Transport cost – ramp up •  Unless building strict one-to-one pipelines, 100%

capacity utilization from day 1 is very unlikely •  Alternative solutions:

–  Replace pipelines concurrently with increasing CO2 volumes

–  Parallell pipelines

–  One oversized pipeline from day 1 •  Challenges:

Reasonable knowledge of future CO2-volumes Who to pay for redundant capacity until full volume

–  Ships

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Cost estimations. Assumptions

•  14 Mtons CO2/y •  100% utilization of capacity •  8% average rate of return, project lifetime = 25

years (construction time 1 year, operation time 24 years)

•  Transport –  Ships: Liquefaction, intermediate storage,

preparation for storage –  Pipelines: Compression

•  Uncertainty: ± 30%

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Transport costs – 6 Mtons/y and 14 Mtons/y

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0

5

10

15

20

25

Case 1.1 Case 2.1 Case 3.1

Cos

t (€/

tonn

e C

O2)

6 Mtonne CO2

14 Mtonne CO2

Pipeline Ship Combination

Transport cost - sensitivities •  Which parameters have the biggest influence on

transport cost? •  Assumption: 5 Mtons CO2 to be transported 500 km

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-2 -1 0 1 2 3

Capex

Opex

Years

Rate

Length

Amount

Change €/tonne CO2

Pipeline, 9.8 €/tonne CO2

-50%

+50%

-5 -4 -3 -2 -1 0 1 2 3 4 5

Capex

Opex

Years

Rate

Length

Amount

Change €/tonne CO2

Ship, 9 €/tonne CO2

-50% +50%

Transport cost, pipelines and ships

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0

10

20

30

40

50

60

70

80

90

100

0 200 400 600 800 1000 1200 1400

€/to

nne

CO

2

Length [km]

Cost variation with length and capacity

Pipeline, 300 kt

Pipeline, 600 kt

Ship, 300 kt

Ship, 600 kt

Pipeline, 5000 kt

Ship, 5000 kt

Pipeline, 15000 kt

Ship, 15000 kt

Ship based CCS chain

CO2 source Liquefaction Intermediate

storage

Loading Pre

treatment / Unloading

Injection for EOR

Onshore Hub Pipeline

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The far end of the chain: FPSOs

FPSO: Floating Production, Storage and Offloading

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FPSOs: Possible benefits

•  Ships may deliver directly to FPSO •  Remove CO2 handling from platform •  Reducing need for closing down

production (?) – Postponed oil production can

significantly reduce NPV of CO2-EOR

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FPSOs: Challenges

•  Incoming CO2 has very low temperature •  Ice formation

•  Intermediate storage need? •  Unloading under hard weather conditions

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Conclusions

•  To transport CO2 by ship introduces flexibility into the CCS chain

•  As a start-up method ships are advantageous as compared to pipelines

•  Cost of ship transport does not vary much with volume and distance, but..

•  Pipelines are more economical for larger volumes over shorter distances

•  There is industrial experience with ship transport and handling of CO2

•  FPSOs seem to be an interesting option for offshore unloading in combination with ships, however, not without challenges

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