Axiom EMI explores the scalability of carbon capture and storage solutions and the potential opportunities presented to the offshore oil and gas service sector.
Carbon capture and storage (CCS) is expected to play an ever-increasing role in the mitigation of CO2 emissions. Projects to date have been a mix of CCS and carbon capture use and storage (CCUS). CCS results in the sequestration of CO2 in abandoned oil and gas (O&G) reservoirs and naturally occurring saline aquifers, while CCUS puts captured CO2 to work by injecting it into producing fields to boost reservoir pressure and enhance oil recovery. Throughout this article, the term CCS will apply to both CCUS and CCS processes.
CCS has been applied to a wide range of industries since the 1970s when several natural gas processing plants in Texas began utilising carbon capture to supply CO2 for enhanced oil recovery. Since then, CCS facilities have captured and stored over two hundred million tonnes of CO2.
Currently, there are 19 operational onshore/offshore CCS facilities worldwide and a further 32 in various stages of planning and development.
The Sleipner Vest offshore CCS facility in Norway has been operational since 1996 and captures CO2 from produced natural gas from the Sleipner and Utgard fields. The facility has a capture capacity of 0.9 million tonnes per year and has injected over 20 million tonnes in total since coming onstream. The captured CO2 is stored in a saline aquifer.
Also in Norway, the Snohvit project captures CO2 from an offshore gas processing facility in the Barents Sea. CCS operations started in 2008 and 0.7 million tonnes per year are injected into a saline aquifer.
Shifting geography, CCS operations at the Gorgon LNG project in Australia started in 2019. CO2 is stripped from natural gas prior to liquefaction. The removed CO2 is injected into the Dupuy formation saline aquifer below Barrow Island. At full capacity, the facility is expected to inject 3.4 – 4 million tonnes of CO2 per year, equating to an emission reduction of c.40% across the project.
An example of an offshore CCUS facility can be found at the Petrobras Lula oil field off the southern coast of Brazil. Commencing CCS operations in 2013, c.0.7 million tonnes of CO2 per year are removed from produced gas and reinjected into the reservoir to enhance oil recovery.
Offshore projects to date can be typified as standalone facilities processing locally produced carbon and either storing in nearby saline aquifers or reinjecting CO2 into production reservoirs for enhanced oil recovery. The average CO2 capture capacity is below one million tonnes per year, but more recent projects are increasing in capacity.
Currently, CCS facilities across the power generation, gas processing, fertiliser production and industrial sectors capture and store 30-40 million tonnes of CO2 a year. To understand the scale of the carbon challenge, emissions from industrial activities and the burning of fossil fuels emitted an estimated 37 billion tonnes of CO2 in 2019. Total carbon emissions from all anthropogenic activities, including agriculture and land use, are estimated to be 43 billion tonnes. Global CCS capacity in 2019 was less than 0.1% of total CO2 emissions.
The Intergovernmental Panel on Climate Change (IPCC) has set a CCS goal to capture 13% of worldwide CO2 emission by 2050, this equates to six to seven billion tonnes of CO2, or an increase on current CCS capacity of 17,000%. In a recent paper published in Nature Scientific Reports, Ringrose and Meckel outline a requirement of c.12,000 operational CO2 injection wells to meet the IPCC 13% of worldwide emission cut target. They also highlight that the required well rate for realising global CCS in the 2020-2050 timeframe is a manageable fraction of the historical well rate deployed from historic petroleum exploration activities.
The next generation of CCS projects will be larger scale, regionally integrated projects servicing carbon intensive sectors, primarily across energy, industry and power production.
As an example of first steps towards the next generation project, Equinor, Shell and Total plan to develop the Northern Lights CCS project. According to the project developers, Northern Lights comprises the transport and storage scope of the Norwegian full-scale CCS project. Liquified and pressurised CO2 will be loaded from the capture site to ships which will transport it to the Northern Lights onshore terminal at Naturgassparken in Norway. At the terminal, CO2 will be offloaded from the ship into onshore intermediate storage tanks. Buffering the CO2 in onshore tanks allows for continuous transport of CO2 by pipeline to the subsea well(s) for injection into the subsurface geological storage complex located c.2,500m below the seabed, south of the Troll field. The Northern Lights project is planned to be developed in two phases.
Phase 1. Capacity to transport, inject and store up to 1.5 million tonnes of CO2 per annum.
Phase 2. Capacity to receive, inject and store an additional 3.5 million tonnes of CO2, equating to a total capacity of 5 million tonnes per annum. Phase 2 will be triggered based on market demand from large, mostly European, CO2 emitters.
The Norwegian full-scale CCS project includes the capture of CO2 from industrial sources in the Oslo-fjord region (Norcem, a cement factory in Brevik, and Fortum Oslo Varme, a waste-to-energy plant), and would utilise the Northern Lights transport, storage and injection infrastructure. The full-scale project was approved by the European Surveillance Authority (ESA) in July 2020. First CO2 injection from the first phase could take place as early as 2023/2024.
The two phases of the CCS project will offer flexibility to receive CO2 from European sources, beyond the 800,000 tonnes per annum of CO2 which would come from Norcem and Fortum Oslo Varme, enabling decarbonisation through a ship-based European CO2 transport and storage network. Currently, Northern Lights has sixteen partners across seven countries interested in project participation, these include CO2 Hubs, industrial carbon emitters and other CCS storage projects.
The Acorn CCS project in the UK, is one of the Northern Lights project partners. Acorn plans to capture and store CO2 from onshore gas facilities at the St. Fergus terminal, making use of existing oil and gas infrastructure, and depositing CO2 in Shell’s abandoned Goldeneye gas field. In addition, the successful development of Acorn underpins further UK CCS developments, including potential CO2 shipping capacity from Peterhead and repurposing an existing pipeline to capture emissions from central Scotland. Assuming a successful FID next year, Acorn could come online in 2024.
Considering the Covid-19 situation, the value of a large-scale CCS projects to create jobs, as well as reduce carbon emissions, is well founded. The opportunities the Northern Lights CCS project, Acorn CCS, and future global projects offer the O&G supply chain are substantial. If c.12,000 CO2 injection wells must be drilled, commissioned and maintained, the potential work created for the O&G supply chain is considerable. The potential to repurpose existing O&G infrastructure, as well as the installation of new equipment for CCS, will further drive oil field service (OFS) demand.
While concerns around CCS costs and technology maturity have restricted developments to localised and project specific applications, Axiom believes the tide has turned and regional carbon networks will be a reality this decade. For the net-zero emissions targets set by the Paris Agreement to be realised, CCS as a solution for industrial sectors is key. Regional networks offer integration, scalability and flexibility to make CCS a major contributor to our green future and support the OFS industry through the energy transition.
Sources: Axiom EMI, Northern Lights CCS, Equinor, Nature Scientific Reports, Global CCS Institute, European Commission, IPCC, Ge mini News, Upstream, Carbon Brief