An Oil and Gas Company’s Perspective on Energy Supply and CO2 Capture & Storage
Special Symposium - Energy
Invited Session on Energy Issues (S-2)
Keywords: energy supply, CO2 capture & storage, oil & gas industry
The oil & gas industry is a significant consumer of power and heat through oil and gas production facilities (upstream) and the transportation of raw materials (crude, condensate etc) and final products (refined products, LNG etc). As important are the downstream facilities such as refineries, LNG plants and chemical and petro-chemistry plants using large amounts of heat, power and other utilities such as hydrogen. Heat and power producing technologies that are applicable for these facilities are of foremost interest for the oil and gas industry. The demand for oil and gas products is increasing worldwide, but there are important drivers that may change today’s market. Two of these are the security of supply and the growing environmental concerns, in particular the CO2 emissions. These two drivers may change the demand for oil and gas in the long run, but the development will also depend heavily on how strong these concerns are, and how much taxes and incentives are used to push this development forward. In the short to medium term, this means that the oil and gas industry needs to ‘‘go green’’.
Increasing energy efficiency, fuel switching, use of renewable energy supply and CO2 Capture and Storage (CCS) are currently pursued. Statoil operates currently two commercial CCS projects: one at the Sleipner gas field in the North Sea, and one in the Algerian dessert at In Salah together with BP and Sonatrach. Soon the Snøhvit LNG project in Northern Norway with CCS will start up. Common for these three projects is that CO2 is captured from natural gas and stored in saline aquifers. Statoil is currently partner in two more ambitious projects, in which CCS for power plants are being investigated. The first is the Halten CO2 project, together with Shell. A new gas fired power plant is considered with post-combustion CO2 capture at Tjeldbergodden in Mid Norway. The second project considers a post-combustion CO2 capture plant at a combined heat and power plant (CHP) at the Mongstad refinery in Western Norway. This project is split into two parts. The first part is the European CO2 Test Centre Mongstad (TCM) with a total capacity of 100 ktonnes CO2/yr with DONG Energy, Hydro, Shell, Vattenfall and the Norwegian authorities as partners. The second stage, where only Statoil and the Norwegian authorities are parties, is a full-scale CO2 capture plant for the CHP plant and possibly other sources at the refinery.
These and many other proposed CCS projects are not only driven by climate change driven political ambitions. An important driver has been the technical or customer driven natural gas quality demands, e.g. at Snøhvit the CO2 in the natural gas must be removed prior to liquefaction. Also at In Salah and Sleipner there are sales quality requirements on the CO2 content. Secondly, in some countries or regions CO2 taxes and quota are imposed, which can make CCS more attractive. For example, the Norwegian Continental Shelf has a CO2 tax between 300 and 400 NOK/tonne, which made CO2 storage the preferred option at Sleipner instead of venting. Enhanced oil recovery (EOR) with CO2 can create additional incomes. This third driver is currently active in the USA and Canada. Increased need for power and heat in certain regions can be a fourth driver for employing CCS commercially. This is partially the case for the Mongstad and Halten CO2 projects. Building additional power plants with CO2 capture can even decrease CO2 emissions of the whole energy supply chain. The Mongstad project is a good example, where integrating the CHP plant into the refinery can improve the overall energy efficiency significantly and provide more flexibility for future refinery development. Another example is the supply of onshore generated electricity to offshore platforms, which can avoid the use of relatively inefficient single cycle gas turbines. The Mongstad CHP plant will provide electricity for the increasing compression needed at the already electrified Troll gas platform and for the future Gjøa oil platform.
It is acknowledged that CCS requires a large research & development (R&D) effort before it is fully accepted and commercially attractive. Good results from 10 years of CO2 storage at Sleipner shows that it can be done safely. But for full acceptance more commercial projects are needed in various geological structures. Moreover monitoring, verification and well integrity can be improved and optimized by R&D. Another important aim of R&D on CO2 capture is to reduce the costs significantly. Both radical new chemistry and concepts (e.g. Alstom’s Chilled Ammonia and oxyfuel) or incremental improvements of existing technology (amine, gasification, reforming) are pursued. For being considered in the R&D portfolio Statoil has developed the following criteria:
• Zero harm to humans and environment
• Electric energy efficiency of natural gas fired power plant must exceed 50%
• At least 85% of the produced CO2 must be captured
• The cost should be lower than 200 NOK/tonne CO2
Such criteria are needed to focus the R&D and may vary significantly over the world. CO2 transport can be done by pipeline or ship. Both are available, and need large-scale demonstrations and specialised R&D to show their potential. A fourth R&D topic is the fundamental properties of CO2 across the value chain. CO2 has an unusual triple and critical point relative to natural gas, oil and water, and may require its own dedicated thermodynamic models, e.g. for multi-phase transient pipeline flow. Especially knowledge of the effect of impurities on capture, transport and storage/EOR may reduce costs and increase safety.
It can be concluded that technology development for CCS is ongoing with increased pace in a co-operation between operators, technology suppliers, R&D institutes, academia and authorities. The technology development is supported by a few operating commercial projects, while many new CCS projects are announced all over the world. This development is an important contribution to securing future energy supply with zero harm to the environment.
Presented Tuesday 18, 15:00 to 15:30, in session Invited Session on Energy Issues (S-2).
