Carbon capture and storage cheaper in Gulf

Reuters

• CCS to account for 20% of emissions reductions
• Costs can be half of those in Europe
• Saudia Arabia aims to capture 44m tonnes a year

Carbon capture and storage in the Gulf is considerably cheaper than in many regions including Europe, although there are several other variables that determine the overall cost of cutting CO2 emissions from industrial activity.

Carbon capture and storage (CCS) will account for 20 percent of the emissions reductions needed to achieve global net zero by 2050, energy consultant Wood Mackenzie forecasts.

The process involves capturing CO2 and transporting it, usually via pipeline, to underground sinks where it is injected into rocks for permanent storage.

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Gulf oil companies have used CO2 capture technology for more than 40 years to purify natural gas, but executing similar processes in cement or steel manufacturing, for example, is more complex.

CCS projects’ full costs – including capture, transportation and storage – currently range from $20-150 per tonne of CO2, Wood Mackenzie estimates, while the average weighted cost is $58 per tonne.

Two-thirds of a CCS facility’s lifetime costs are upfront, Wood Mackenzie says, but it predicts project costs will fall 20-25 percent over the next 20 years.

Gulf advantage

Costs for CO2 transportation and storage in depleted oil and gas fields – as is usual in the Gulf – range from $15-40 per tonne, Norway’s Rystad Energy estimates.

These costs are substantially lower than in Europe, where CO2 is usually stored in saline aquifers at a price of around $40-50 per tonne. As such, the Gulf has a sizeable cost advantage.

The biggest factor determining transportation costs is distance. The closer capture and storage sites are located to each other, the cheaper the transportation.

“The remaining part is capture and that influences how much your levelised cost per tonne will be,” said Yvonne Lam, head of carbon & CCUS – carbon capture, utilisation and storage – research at Rystad Energy in Oslo.

“That depends on the concentration of CO2. If it’s coming from a gas processing plant, it’s very cheap because it’s a very mature technology, the CO2 concentration is high and energy needed to (capture) CO2 comes from an abundant, on-site source.”

In such situations, capture can be achieved for less than $25 per tonne.

“But if it’s chemical, steel or cement plants, then it can go up to $75-100 per tonne,” said Lam. Industrial plants are rarely located near to underground sinks.

Such costs are “very significant”, Lam added. “Carbon capture and storage doesn’t generate any revenue. It is only a cost to the emitters themselves.

“So, if there’s no incentive, if you can emit CO2 for free, why do you want to invest and create extra costs?”

Nevertheless, Gulf policymakers seem serious about expanding the region’s CCS capacity, which currently represents around one-tenth of the global total.

For example, Abu Dhabi National Oil Co aims to increase its CO2 capture capacity more than sixfold to 5 million tonnes per year (mtpa).

It says this will be collected mostly from its gas processing plants and will provide the same amount of carbon capture as a forest twice the size of the UAE.

Beyond capture and storage, CCUS attempts to find uses for the captured carbon rather than simply storing it.

Saudi Arabia aims to raise its CCUS capacity to 44 mtpa by 2035, according to a May 2023 report by The King Abdullah Petroleum Studies and Research Center.

The broader Middle East is home to nearly 5 percent of announced CCUS projects worldwide and is ranked fifth in terms of planned and operational CCUS facilities, a Rystad report states.