Capacity Constraints to CCS Build-out Rates

Keith Burnard (IEAGHG) Wilfried Maas (IEAGHG ExCo)

CCS Build-Out Rate Meeting10 January 2017

Paris, France

Barriers to Implementation of CCS: Capacity Constraints

• Study undertaken by Ecofys, NL (2012)• Study outline:

• IEA CCS Road Map as baseline• High ramp up rate for CCS• Will there be materials, equipment, service, supply

constraints?

• Report available at IEAGHG website

Study Scope• Full CCS Chain (capture, transport, injection)

• Coal fired power plants covered by IEA CCC• Storage assessments – IEAGHG/GCCSI report

• Only current commercial capture technologies• Industry , Power Generation and Upstream Oil

and Gas• Pipeline transport

Human resources Raw materials/ Sub-

components technology blocks

Consultant engineer, legal and financial

Operation CO2 transport

EPC contractors major components/technology

blocks

Procurement

Engineering

Project management

Construction

Commissioning

Operation CO2 injection

Operation power plant with capture

EPC contractors major components

Procurement

Engineering

Project management

Construction

Commissioning

EPC contractors major components/technology

blocks

Procurement

Site screening, surveys and Engineering

Project management

Construction

Commissioning Pow

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Human resources Raw materials

CCS chain

Supp

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Human resources Raw materials/ Sub-

components technology blocks

Consultant engineer, legal and financial

Operation CO2 transport

EPC contractors major components/technology

blocks

Procurement

Engineering

Project management

Construction

Commissioning

Operation CO2 injection

Operation power plant with capture

EPC contractors major components

Procurement

Engineering

Project management

Construction

Commissioning

EPC contractors major components/technology

blocks

Procurement

Site screening, surveys and Engineering

Project management

Construction

Commissioning Pow

er p

lant

, cap

ture

and

com

pres

sion

CO

2 tr

ansp

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Human resources Raw materials

CCS chain

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Roll Out Conclusions• Historical deployment rates in power sector

are comparable or greater.• Total capacity for power supply chain

significantly higher if you include, nuclear, wind etc.,

• Technology turn over industry much higher• More CO2 captured by 2045 than current

annual volume of oil and gas production• Blue Map assumes exploration goes down• Going up/Shale gas?

Supply chain risks

Identified issues (2012)• Some capture components still under development • Supplier concentration for capture• No overall winner for capture technologies

• PC – large scale absorbers• IGCC – hydrogen turbines• Oxy – boiler and flue gas treatment

• Meeting demand for high pressure CO2 compressors will be an issue

• Pipe laying equipment• Oil and Gas extraction will compete severely with CCS

• Skilled personnel• Equipment availability

Recommendation's• More upfront investment for reservoir

exploration and transport infrastructure• Career development (summer school)• Geological storage assessment – a knowledge

gap?• Diversity of suppliers• Increase institutional knowledge –

regulators/permitting authorities early• Recycling/material optimisation

Build out rate of the CCS industry

A massive undertaking of the scale of the current NG industry Comparison from analogies

Roadmaps show rapid CCS industry build out

75-150 start up CO2 capture facilities 75-150 ~20 MW compressors ~2000 km pipeline ~ 23-45 mtpa CO2 ships (assuming 15%) 150-300 wells – 40-100 rigs

30-60 storage sites 60-120 platforms/wellpads 150-300 Million tonnes CO2 stored 75-150 Billion USD Case study NG industry

CCS Roadmaps suggest 150-300 Million tonnes CO2 per year build out rates of capture and storage Equivalent with required build out rates of individual CCS items per year:

A significant task for CCS deployment is required by 2040 under the IEA 2DS

*Source: IEA, 2016 Energy Technology Perspectives 2016: Towards Sustainable Urban Energy Systems. Paris. OECD/IEA.

Global Status of CCSNovember 2016

38 large-scale CCS projects –combined CO2 capture capacity of approximately 70 Mtpa: 21 projects in operation or

construction (40.3 Mtpa) 6 projects in advanced

planning (8.4 Mtpa) 11 projects in earlier stages

of planning (21.1 Mtpa)40 Mtpa

Non-OECD OECD

~4,000 Mtpa of CO2 captured and stored by 2040(IEA 2DS Scenario)*

CCS facilities in context of scale Taking Quest CCS as an example, which injects 1 Mtpa of CO2 from the Scotford Upgrader:

The CCS Facility is one of many process facilities at the Scotford complex The Scotford Upgrader has a capacity of 255 kbbl/d, the Refinery processes 100 kbbl/d

Against total Upgrading & Refining capacity of 1,788 kbbl/d in Alberta, Canada

Scotford

Quest CCS

CCS facilities in context of scale Another example is Boundary Dam CCS, capturing 1 Mtpa of CO2 from Production Unit 3:

This enables a lifetime extension of 110 MW capacity Boundary Dam Power Station has a capacity of 824 MW, against a total fossil fuel-based generating

capacity of 3034 MW

Boundary Dam Power Station

CO2 Capture & Compression

Map of generating plants in Saskatchewan

75-150 Capture facilities p.a.: Analogy Power Plant Build out

Gas CCGT power plants: In recent history comparable peak rate additions have been achieved in CCGT alone [up to 119 in one year][ca. 360MW average plants]

While technically global CCGT build-out rates of 60-120 plants were achievable, the actual rate is strongly dependent on incentives in place

Chinese Coal Power Capacity: 2 power plants per week were achieved for several years in China alone:[ca. 0.5GW plants]

The Power sector was considered for analogy of technical feasibility of build-out rates, withsufficient incentives in place equally applies to other sectors, recognising that the incentives to be sector-specific

Source for CCGT graphs: Platts World Electric Power Plants Database, 2013Source for Coal Power graph: Bloomberg, ‘Climate Promises can’t kill Asia’s Coal addiction’

75-150 Compressors (20MW) per annum

• Ecofys report references six large compressor manufacturers, as a selection (more manufacturers are available for CO2 compression)

• Across these six, each would deliver 12 – 25 compressors per year

• MAN Diesel & Turbo alone delivers 90 – 170 machine trains per year (of which ca. 20 are very large units), with the ability to increase this number

• Some of the other manufacturers have larger capacities

• The Natural Gas industry operates x000’s of compressors of different sizes• Large scale compressors are common on LNG trains:

• 92 trains operating globally, with 2-5 large compressors operating per train• Another 33 trains are under construction for 2016-2019

• Compressor manufacturers also supply large Gas and Steam turbines • Previous CCGT power plant analogy demonstrated ability for large build-out

Source LNG numbers: IGU 2016 World LNG Report

~ 2000 km 150-300 Mt pipeline capacity per annum: NG Analogy

Natural gas pipelines have been built at over 2000 km/year, with recent years seeing 8000 km/year (chart 1). Produced gas is transported from geological formations that can hold gas accumulations to industrial hubs

For CCS CO2 needs to be transported back from the industrial hubs to similar geological formations for storage – the pipeline sizes and metallurgy are similar.

Global install rates are illustrated on the right showing that in the last decade over 5000km of pipeline has been installed annually.

Source: Wood Mackenzie Upstream Data Tool Q4 2016 – global transportgas pipelines [ref 9]

Assume each site requires 20km 30-60cm pipeline 1200km needed each year

Every 10 sites require 100km 60-120cm pipeline 600km needed each year

Every 100 sites require 200km >120cm pipeline 200km required each year

23-45 Mtpa CO2 in ships: LNG: an analogue for large scale ship construction and point-to-point transport Average build out rate of 10mmtpa LNG ≡12 Mtpa CO2

Best year brought on 47 Mtpa CO2 (39 mmtpa LNG) equivalent capacity At LNG vessel conditions CO2 is about 1.2x the density of CH4

While technically 30-40 mtpa LNG was achievable, the actual rate is strongly dependent on incentives in place

Source: Woodmac Global LNG supply tracker Q4 2016

150 – 300 Wells per annum -> 40-100 drilling rigsO&G industry analogue

• Global active rig counts vary significantly. Year-on-year change greater than ±300 rigs

• 40-100 rigs for CCS ~ 4-10% of 2014 rig numbers

• wells 0.25-1 Mtpa• rig time 15-90 days per well• CCS wells replaced after 20 years

• While technically adding 300 rigs is achievable, the actual rate is strongly dependent on incentives in place

Sources: CO2 injection per well; CarbonNet [ref 6]Global well number growth; Globalshift [ref 8]

Reduced carbon emissions scenario to 2100:

60 – 120 platforms / wellpads per annum30 – 60 storage sites per annumO&G industry analogy

The number of oil and gas fields developed per decade is in the thousands

In 2000-2010 it totalled over 350 production sites per year

Source: Wood Mackenzie Upstream Data Tool Q4 2016, field on stream dates. Records with start date.

150 – 300 million tonnes injection per annum: NG analogy

2010 spike due to production recovery following drop (below capacity) in 2009 after 2008 crash

Source: BP Statistical Review of World Energy [ref 1] • Gas field development and production capacity growth is an analogue for potential rates of storage site development and injection capacity growth

• The growth in historic natural gas production ranges from 0 to 350 Mt/a CO2 equivalent (at typical reservoir conditions; 2500mSS, 3600psi, 82°C) Global development of equivalent storage capacity

75 – 150 billion USD per annum: Analogue of other energy investment

The IEA WEO 2016 estimates that close to 40% of Fossil Fuel investment in Power will be in CCS in a 450 scenario [average 87.5 bln USD/year]. Total Fossil Fuel investment in such a scenario is

20% of Renewables investment

Renewable investment has already seen a 200-300 billion USD/a huge financial scale-upin the past years, surpassing what is required in fossil fuel power:

Roadmaps show rapid CCS industry build out

75-150 start up CO2 capture facilities 75-150 ~20 MW compressors ~2000 km pipeline ~ 23-45 mtpa CO2 ships (assuming 15%) 150-300 wells – 40-60 rigs

30-60 storage sites 60-120 platforms/wellpads 150-300 Million tonnes CO2 stored 75-150 Billion USD Case study NG industry

CCS Roadmaps suggest 150-300 Million tonnes CO2 per year build out rates of capture and storage Equivalent with required build out rates of individual CCS items per year:

References

1) BP databook 20152) Pipeline map from Washington post: https://www.washingtonpost.com/graphics/national/maps-of-american-

infrastrucure/?utm_campaign=buffer&utm_content=bufferf44a5&utm_medium=social&utm_source=facebook.com3) Onshore pipeline Image: CO2 pipeline from Beulah, North Dakota, to southern Saskatchewan (Photograph courtesy of

Dakota GasificationCompany). https://hub.globalccsinstitute.com/publications/what-happens-when-co2-stored-underground-qa-ieaghg-weyburn-midale-co2-monitoring-and-storage-project/40-what-if-there-leak-co2-pipeline

4) Norwegian gas pipeline data: Norwegian Petroleum website. http://www.norskpetroleum.no/en/production-and-exports/the-oil-and-gas-pipeline-system/

5) UK NTS gas pipeline data from:• Tiratsoo, E.N. (1972). Natural Gas. Beaconsfield: Scientific Press Ltd. pp. 216, 221, 222A• http://www.oldflames.org.uk/Plant%20Operations%20Department.pdf• Williams, Trevor I. (1981). A History of the British Gas Industry. Oxford University Press. pp. 177–8

• Wilson, D Scott (1974). North Sea Heritage: the story of Britain's natural gas. British Gas. p. 27.

6) CCS well injectivity: The CarbonNet Project . (2015). Site characterisation for carbon storage in the nearshore Gippsland Basin. The State of Victoria.7) Baker Hughes Rig data: Baker Hughes. (n.d.). International Rig Count. Retrieved Dec 6, 2016, from http://phx.corporate-

ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsintl8) Global well numbers drilled (used to estimate average drilling time): Global Shift. (n.d.). Global Shift: World Group. Retrieved Dec 6, 2016, from

http://www.globalshift.co.uk/global.html9) Woodmackenzie Upstream Data tool – global transport gas pipelines10) Woodmackenzie Global LNG supply tracker Q4 2016

BACKUP

CCS in context of scale: USA power plant example

• The majority of US power is generated by coal and natural gas powered power plants (64% in 2015), by• 511 coal-powered

electric power plants• 1740 natural gas-

powered electric power plants

Source Washington Post

Discovery & Maturation of storage resources:

Hydrocarbons require Caprock that seals over geological

time Geological trap (to hold the buoyant

fluid that does not dissolve in water) Source of hydrocarbons Formation that can be produced at

commercial rates

Storage resources are more readily discovered than hydrocarbon resources Caprock that seals over millennia Migration pathway that does not

have leak paths does not require a geological trap because CO2 dissolves, and is capillary trapped.

Formation that can be injected into at required rates

Sufficient connected volume to allow pressure diffusion or ability to produce water to manage pressure

Conversion factors & units

• 3600psia as the working subsurface pressure

• mmtpa – million tonnes p/a. imperial units

• Mtpa – mega tonnes p/a = million tonnes p/a = metric units

Props from PVT calculatorCH4 CO2 Ratio Ratio

°C psi kg/m3 kg/m3kg CO2/kg CH4

Mt CO2/Bcm CH4

15 14.5038 0.670982 2000 80.93 363.1643 4.49 3.082 2200 89.1355 421.3891 4.73 3.282 2400 97.2251 475.6563 4.89 3.382 2600 105.1668 523.1081 4.97 3.382 2800 112.9323 563.3844 4.99 3.382 3000 120.4982 597.4266 4.96 3.382 3200 127.846 626.4422 4.90 3.382 3400 134.9621 651.5006 4.83 3.282 3600 141.8378 673.441 4.75 3.282 3800 148.4685 692.8939 4.67 3.182 4000 154.8535 710.3314 4.59 3.1

Metric system standard conditions (1 bar)

UK national transmission system runs at 85 barpipelines

CH4 CO2 Ratio

°C bar kg/m3 kg/m3CO2/CH4

15 100 80.9 890.1 11.015 110 90.2 899.3 10.015 120 99.6 907.8 9.115 130 108.9 915.6 8.415 140 118.1 922.9 7.815 150 127.2 929.8 7.315 160 136.0 936.2 6.915 170 144.5 942.3 6.515 180 152.6 948.2 6.215 190 160.4 953.7 5.915 200 167.8 959.0 5.7

Storage project assumptions

• As a base case • a single site storage location is taken to be 100-200 million tonnes of CO2 capacity, • injecting at rates of 5-10 million tonnes per year• Each well will inject 1 million tonnes per year – so a single injection location will require 5-10

wells• Subsurface spacings will require offshore 1-2 platforms

• Water extraction will be expected to be employed to maintain the rates through a 20 year injection life, in some facilities it will start immediately, in other locations it will be delayed.

• As the industry builds water voidage will be more common

• A typical project of 5Mtpa will have 20km pipeline of the 30-60cm range• Each 10 injection projects will have a supply line of 100km in 60-120cm range• Each 100 storage sites will have a trunk line of 200km of >120cm diameter

IEA 2DS forecast

• This requires about 90Gt of storage capacity and a build out rate with a maximum of 0.26 Gt/a

• The IEA forecasts the following storage rates for the 2DS scenario

International Energy Agency (2015), Energy Technology Perspectives 2015, OECD/IEA, Paris

ETP 2016 CCS requirements

2017-2050Average stores developed 27 stores/aAverage wells drilled 162 wells/aAverage capture added 0.16 Gt/a

World CO2 storage resource is large

• Because we do not need to find isolated pockets of hydrocarbon, the constraints placed on CO2 storage are lower than for hydrocarbon discovery.

• Just like hydrocarbon fields, however, there will also be “elephant” stores that will make the early scale up easier.

• The figure below shows one combination of the global storage capacity estimates.

• There is no reason to assume that the IEA targets are impossible to achieve.

Global Storage Capacity Estimate:

Gas production

• CO2 is denser than gas in the reservoir, by approximately a factor of 3(reservoir T&P)

• Growth rates in gas production range from 20 to 50 Mt/a, so in CO2 terms this will be 60 to 150 Mt/a.

• A pipeline with a volume/annum capacity can transport 5 time more CO2 than gas on a mass basis (5 in density at pipeline conditions).

• World gas production

BP Statistical Review of World Energy

Transportation: USA example

• CCS and gas production are almost mirror images• Gas is transported from geological formations that can hold

gas accumulations to industrial hubs• CO2 needs to be transported back from the hubs to the similar

geological formations

• CO2 is ~5-7 times more dense than natural gas(pipeline conditions), making CO2 transport pipelines smaller

• The networks would be similar in length and form• The USA took 60 years to organically build a

network that transports over 700 Bcm (equivalent to ~5 Gt CO2)

• USA emits ~15% of global emissions equivalent to 0.8 Gtpa CO2.

CO2 pipeline from Beulah, North Dakota, to southern SaskatchewanSource: courtesy of Dakota Gasification Company [ref 3]

USA gas pipelines mapSource Washington post [ref 2]

• CCS and gas production are almost mirror images• Gas is transported from geological formations that can hold

gas accumulations to industrial hubs• CO2 needs to be transported back from the hubs to the similar

geological formations

• CO2 is ~5-7 times more dense than natural gas (pipeline conditions), making CO2 transport pipelines smaller

• The networks would be similar in length and form• The USA took 60 years to organically build a

network that transports over 700 Bcm (equivalent to ~5 Gt CO2)

• USA emits ~15% of global emissions equivalent to 0.8 Gtpa CO2.

Transportation: North Sea example

Sources:• Norwegian gas pipeline data [ref 4]• UK NTS (National transmission system) data from various sources [ref 5]• Gas production of Norway and UK BP Statistical Review of World Energy [ref 1]