Adnoc seeks to turn carbon capture into revenue stream

Heirloom Carbon via Reuters

• Oil major offers capture, storage
• Interest in Gulf, Asia and US
• IEA warns over energy status quo

In the mountains of Fujairah, in the north of the UAE, an industrial site built by Adnoc sucks carbon directly from the air and converts it into rock.

The CO2 is injected into the Hajar mountains, where the peridotite rock is capable of sequestering the greenhouse gas, thanks to technology developed by 44.01, an award-winning Omani start-up.

Five hundred kilometres to the southwest, in the industrial city of Ruwais, engineers from the Abu Dhabi state oil company are building another carbon capture and storage (CCS) hub. This time, the CO2 will be injected into an aquifer.

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“The selected aquifer contains deep saline toxic water, but is a great reservoir for CO2,” an Adnoc spokesperson told a conference on carbon capture at the Khalifa University Abu Dhabi last week.

CCS has become a vital climate mitigation technology, especially for hard-to-abate industries such as cement, power generation, and oil and gas. Adnoc is hoping it can also become a profitable business line.

The oil company is building a platform to offer CCS services to businesses in the UAE and abroad. 

“It is still early days, but we may be in a position to accept inflows of CO2 from abroad soon,” the Adnoc spokesperson said.

If the Fujairah and Ruwais pilots succeed, they will be followed by more large-scale CCS projects.

“The aim is to help decarbonise clients in the UAE and, for example, in Asia, by offering them carbon solutions,” the spokesperson said.

Last week Adnoc signed a deal with Santos, an Australian oil and gas company, to develop a joint global carbon management “platform” supporting the decarbonisation of customers in the Asia-Pacific.

Adnoc is also looking to develop a CCS portfolio in the US and Mexico. In August, it made an agreement with Occidental Petroleum to evaluate investment opportunities in direct-air capture (DAC) and CCS hubs in the United States and the UAE.

40 CCS sites up and running, another 400 planned

Mohamed Abu Zahra, Mena head of the Global CCS Institute, said that over the past three years, the capacity announced for CCS has increased by 50 to 60 percent.

The institute’s 2023 report says 392 CCS facilities around the world are in the pipeline, with a capacity of 400,000-500,000 tonnes per year and a dedicated site for geological storage or enhanced recovery. There are also hundreds of smaller projects planned.

About 40 sites are now operational, three of which are in Qatar, the UAE and Saudi Arabia.

Reuters/David Stanway

The pipeline growth is being driven mainly by the US, where the number of planned projects increased from 81 to 154 this year. The world’s largest CCS project globally, with a capacity of 10.6 million tonnes per annum (mtpa), has been developed in Brazil by state oil company Petrobras.

Abu Zahra said the US could easily reach a capacity of 200 to 250 mtpa by 2030. Policies and incentives such as the Inflation Reduction Act gave a big push to the technology in the US, he said.

The European parliament has just adopted the Net Zero Industry Act, while Norway, Denmark and the Netherlands have been acting or putting funding mechanisms in place. The number of CCS projects in the UK grew from 27 to 45 between 2022 and 2023.

“If we deploy all current projects into the pipeline, the worldwide capacity will reach 400 mtpa of CO2 capture by 2030. To achieve our climate target, we need to see gigatons,” Abu Zahra said.

According to the report, the Middle East and Africa account for 8 percent of global CCS capacity. 

Adnoc has announced a net-zero target by 2045. It has doubled its CO2 carbon capture target to 10 mtpa by 2030.

The company is under international scrutiny, as the UAE is hosting the Cop28 climate conference that begins on Thursday.

Adnoc runs one CCS plant of 0.8 mtpa decarbonising Emirates Steel. It has made a final investment decision for projects to add around 4 mtpa.

In Saudi Arabia, the Al Jubail industrial plant is projected to have an initial capacity of 9 mtpa. The aim is a capacity of 44 mtpa by 2035.

However, the International Energy Agency has warned that CCS is energy-intensive and cannot be used just to maintain the status quo of high oil and gas production.

According to the IEA, if oil and natural gas consumption evolves as projected under today’s policies, limiting the temperature rise to 1.5C will require capturing 32 billion tonnes of CO2 by 2050, including 23 billion tonnes via direct air capture.

Yet the amount of electricity needed to power CCS would be greater than today’s world electricity demand, the IEA argues.