Shell
THE PETERHEAD CCS PROJECT OCTAVIUS CONFERENCE 17-19 NOVEMBER 2015 PARIS WILFRIED MAAS GM CCS TECHNOLOGY
UP HERE TOO MUCH CO2 IS A PROBLEM
DEEP DOWN UNDER THE NORTH SEA THERE IS A SOLUTION
Shell
CAUTIONARY STATEMENT
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2014 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, November 19, 2015. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.
We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330
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ENERGY & ENVIRONMENT – INSEPARABLE ISSUES
Shell
SHELL INVOLVEMENT IN CCS PROJECTS
TCM = Technology Centre Mongstad
Quest TCM Peterhead Gorgon Boundary Dam
GORGON
TCM PETERHEAD
QUEST
BOUNDARY DAM
Industrial scale projects in operation
Industrial scale projects in construction
Planned industrial scale project (FEED)
Involvement through Shell Cansolv Technology
Shell
SHELL CCS: COMPETENCE BASED PROGRAM
Copyright Shell Global Solutions International 5
Shell operated Non operated
Gorgon Quest TCM
Onshore storage
Offshore storage
Saline aquifer storage
Depleted reservoir storage
Pre-combustion capture
Post-combustion capture
Contaminated gas
Heavy oil
Refining
Gas fired power
In FEED
Peterhead
Shell
THE UK CCS COMPETITION
Without CCS, the additional costs to run a decarbonised UK economy in 2050 will be
£32 billion.
32Billion
£/Annum
UK Energies Technology Institute
Prize for Britain Prize for Competitors & Competition History
History July 2012 – Eight initial bids
submitted to DECC-OCCS including Shell/SSE;
October 2012 – DECC select four bidders to take through the Bid Improvement Process (BIP);
January 2013 – Shell re-submitted a bid on behalf of Shell & SSE
20 March 2013 – DECC announce Peterhead is one of two preferred bidders. White Rose (Drax Coal+CCS) is other project.
24 February 2014 – FEED contract signed
Prize – DECC grants £1 billion capital to project(s)
Government Objective – “By the 2020s, private sector electricity companies can take investment decisions to build CCS equipped fossil fuel electricity generation facilities without Government capital subsidy at an agreed contract for difference strike price that is competitive with the strike price for other low carbon generation technologies”
Shell
PROPOSED PETERHEAD PROJECT AT A GLANCE
World First – the first full-scale CCS project on a gas-fired power station
Status – proposal currently in Front End Engineering Design phase, seeking regulatory approvals and Government funding for capital and operating expenses
Where – capture at Peterhead Power Station; storage in depleted Goldeneye gas reservoir (100 KM offshore)
Impact –10 to15 million tonnes of CO2 captured over a 10 to 15-year period (90% CO2 capture from one turbine)
Technology – post-combustion capture using amines
Goldeneye Platform
St Fergus Terminal
Peterhead Power Station
Shell
CO2 CAPTURE – CANSOLV AMINE CAPTURE TECHNOLOGY
Copyright Shell Global Solutions International 8
Project Technical Line-Up
Copyright Reserved. 9
PETERHEAD CCS – REUSING EXISTING OFFSHORE ASSETS
Assets to be reused
102km of 20 inch pipeline + methanol line
Platform which started life in 2004
Depleted gas field with pressure history starting in 1996, production history from 2004
Three exploration and appraisal wells – plugged
Five production wells
Core, seismic, sea bed surveys
Goldeneye Platform
568 BScf gas produced
Shell
MULTIPLE WELLS, 6 YEAR PRODUCTION TEST
Proven seal – 50 million year test
All the appraisal and well data
Performance since start of production
10
47
10
9
1.7 0.61.3
6
34
0
5
10
15
20
25
30
35
40
45
50
CO2 space f rom Produced gas
Heterogeneities "Residual Water Saturation"
Mixing with reservoir gas
CO2 Dissolution in brine
Bouyancy f illingUnit E
Water leg extra capacity
Combined Storage Capacity
Mil
lio
n T
on
nes C
O2
Storage capacity of Goldeneye for pure CO2
CAPACITY IS EASIER TO ESTIMATE FOR A DEPLETED FIELD THAN AN AQUIFER – BUT THE DETAILS MUST BE CHECKED
Examination of geological and fluid dynamic complexities
Leads to modifications from the first estimate for structural storage capacity (depleted field)
Additional capacity is possible in this case by extending into aquifer storage
Mixing with remaining hydrocarbon gas
Refill efficiency
Irreversible compaction
Reservoir structure/ heterogeneity
Unstable displacement
Secondary drainage (flood front)
Reducing factors
Increasing factors Dissolution in brine
Chemical reactions with rock
CO2/water relperm end points
Water leg
Lateral aquifer
Capillary trapping
Imposed limits on plume/injection High risk locations
Maximum pressure
Neighbouring fields and aquifers
Early EOFL
Residual gas saturation (Sgr)
Dynam
ic V
ariability
Voidage from production
Shell
HISTORY MATCHED SIMULATION: BEFORE INJECTION
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CO2 H/C
Water
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1 YEAR OF INJECTION
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CO2 H/C
Water
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2 YEARS OF INJECTION
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CO2 H/C
Water
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3 YEARS OF INJECTION
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CO2 H/C
Water
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5 YEARS OF INJECTION
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CO2 H/C
Water
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6 YEARS OF INJECTION
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CO2 H/C
Water
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10 YEARS OF INJECTION, 10MT CO2
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CO2 H/C
Water
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1 YEAR AFTER INJECTION STOPPED, 10MT CO2
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CO2 H/C
Water
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11 YEARS AFTER INJECTION STOPPED, 10MT CO2
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CO2 H/C
Water
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20 YEARS AFTER INJECTION STOPPED, 10MT CO2
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CO2 H/C
Water
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50 YEARS AFTER INJECTION STOPPED, 10MT CO2
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CO2 H/C
Water
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180 YEARS AFTER INJECTION STOPPED, 10MT CO2
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CO2 H/C
Water
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CONTAINMENT: MICROSCALE SCRUTINY
Rock constituents have been measured, and geochemical effects have been assessed
In the lab with rock samples: showing that the core is not weakened by the injection of CO2
In a coupled simulation examining the potential effects over the next 10,000 years
The caprock is found to become more sealing (porosity decreases)
24 Calcite dissolution Ankerite precipitation
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DETAILED INSPECTION OF THE SEISMIC DATA AT ALL DEPTHS
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Time-slice at 264ms
Top Reservoir at ~2060ms
Pleistocene channel causes imaging artifacts
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BOW-TIE CONTAINMENT ASSESSMENT
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FIT-FOR-PURPOSE MONITORING PLAN
Baseline MBES
Pre-inj Injection Post-closure Post hand over
Continuous: well integrity, sea-
bed, well by well flow metering,
CO2 quality, reservoir P, DAS,
DTS
Start End
4D [3D VSP]
4D seismic
(complex)
+ VSP
4D seismic, store
Mid
+1 y Multi beam echo sounder x 2
Reservoir P,
1.5 years
Base
mon
itorin
g
dete
ct, c
onfo
rman
ce
Irregularity/contingency monitoring if irregularity suspected Define
Delineate
Detect
Tracers
Pressure
+6 y
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CO2 BEHAVIOUR AND PROPERTIES
Material selection
Well design
Depressurisation design
CO2 detection systems
Permit to work changes
Emergency response
Depressurization
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WELL MODIFICATIONS
Change “ trees” to low temperature versions
Upgrade seals
Use smaller tubing to create back pressure to retain dense phase in steady state flow
Replace packers
Add multiple gauges and fibre optic monitoring technology
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Narrow tubing creates backpressure, maintains dense phase
Shell
EXCELLENT STORAGE CANDIDATE
Capacity
Containment
Injectivity
Monitorability
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2014 2015 2016 2016-18 2019-20
Technical FEED
Supply chain tendering & commercial agreements
Detailed engineering
Commissioning & start-up
Construction + =
