from a project management perspective Gerbert van der Weijde Global CCS Institute / CSLF meeting on project integration London, November 2011

Transcription

1 CCS project integration from a project management perspective Gerbert van der Weijde Global CCS Institute / CSLF meeting on project integration London, November 2011

2 Contents Introduction ROAD The importance of front-end loading Status ROAD Project at end of define phase Experiences from the ROAD project: reflecting on the framework Recommendations Page 2

3 MPP3 Capture location Location: Maasvlakte Power Plant 3 Output: 1070 MWe Efficiency: 46% Operational: end 2012 Capture ready Page 3

4 CO 2 Capture Unit Technology: post-combustion Size: 250 MW equivalent Capture rate: 90% CO 2 capture: 1.1 mln tonne/yr Operational: 2015 Page 4

5 CO 2 Transport Pipeline length: 5km onshore, 20km offshore Diameter: 16 Capacity: 1.5 mln tonne / year (gaseous) 5 mln tonne / year (dense) Design specs: 175 bar, 80 o C Pipeline insulated Page 5

6 CO 2 Storage Location Depleted gas reservoir P18 Operator: TAQA Depth: 3,500 m Capacity: 35 mln tonne Available: 2014 Alternatives / future expansion options are being investigated (EOR) Page 6

7 Co-operating Partners ROAD Maasvlakte CCS Project C.V. is a joint venture of: E.ON Benelux Electrabel Nederland (GDF SUEZ Group) In co-operation with intended partners: TAQA Energy GDF SUEZ E&P With financial support of: European Commission (EU) Government of the Netherlands Global CCS Institute Page 7

8 Time Path and Milestones 14 July 2009 : EU project proposal submission September 2009 : Project selection by EU May 2010 : Grant decision by Government of the Netherlands September 2010 : Publication starting note Environmental Impact Assessment Q : EIA and permit procedures Q : Final Investment Decision 2014 : CCS chain mechanically complete 2015 : Integrated CCS chain operational : Demonstration phase CCS chain 2020 : Start commercial operation Page 8

9 The Importance of Front-End Loading [1/3] Front-end of a project: phases of the project leading up to the final investment decision (FID) FID Appraise (FED1) Select (FED2) Define (FED3) Execute Operate Front-End Development Front-end loading (FEL): Investing significantly in the front-end development (FED) of a project Front-end loading widely recognized as essential for eventual project success Page 9

10 The Importance of Front-End Loading [2/3] Goal of front-end development Developing sufficiently complete image of the project, enabling owner to decide to commit resources and address risks To be developed during front-end development Definition of business needs & objectives Concrete path chosen to meet these objectives Definition of project objectives Scope Definition of design basis Execution planning Project risk analysis Definition of required resources (financial / organizational) Why? What? Where? When? How? Who? Page 10

11 The Importance of Front-End Loading [3/3] Flexibility early in the project should be used to Create vision on the project Take into account stakeholder interests Define an effective strategy to deliver a valuable project Maximize use of opportunities to create value Maximum value for the business Minimum need for costly and time consuming changes after FID During the front-end development of a project Use a structured stage-gate process Apply value improving practices Build an integrated project team which is aligned around common goals Page 11

12 CCS Project Development Framework Page 12

13 Status ROAD Project at end of define phase [1/3] Activity Project Context and Opportunity Definition and Recommendation Project Development Approach Site Selection Stakeholder and External Relations Environment Health and Safety ROAD status during define phase Board Paper (incl. project status, strategic fit, organizational setup, costs & financial metrics, risks & risk mitigation, procurement, permitting, stakeholder management, execution planning) available. Project execution plans in place. Site selection not applicable for ROAD (MPP3 already under construction). Soil investigation performed. Leasehold ready for signature. Stakeholder management plan & team in place. Public engagement activities ongoing. Environmental studies completed. Environmental Impact Assessment submitted to competent authorities. Permit applications submitted. Several risk assessments completed, including HAZID, HAZOP, maximum credible accident study and reliability assessment. A rough outline of timing of finalizing different H&S systems and documents has been prepared. A safety management team for construction and commissioning is still to be established, as are detailed procedures on site surveys. However, coordination risks on site are being investigated. Page 13

14 Status ROAD Project at end of define phase [2/3] Activity Fuel Supply Power Plant Capture Facility CO 2 Product Infrastructure Project Delivery Capital / Operating Costs Operations Revenue and Trading (CO 2 Product Only) ROAD status during define phase Not applicable for ROAD (E.ON MPP3 scope). Power plant engineering not applicable (E.ON MPP3 scope). FEED study capture plant completed. Value engineering capture plant completed. Detailed engineering started. Basic design interfaces completed. CO 2 specification is fixed, including impurities, pressures and temperatures Compressor and dehydration process and design has been assessed in FEED CO 2 transport pipeline has been specified Not applicable for ROAD (E.ON MPP3 scope). EPC contract capture plant supplier ready for signature. Contract with storage partner ready for signature. Cost estimates (+/ %) available. Investigation performed on location of control room, combine with MPP3 or separate. Operation will be possible from both locations Utilities agreement (incl. power, steam and utilities supply, ETS compensation, operating/dispatch principles) with E.ON in place. Page 14

15 Status ROAD Project at end of define phase [3/3] Activity Management Systems Ownership and Legal IP Management Financial Analysis Risk Funding Future Work Plan ROAD status during define phase Allocation of the responsibilities along the entire CCS chain agreed. Partner agreements ready for signature. Project ownership and governance structure in place. IP system has been set up to share info on E.ON power plant with ROAD IP of capture supplier covered in EPC contract and license agreement. Detailed discounted cash-flow model in place. Risk workshops held with all disciplines in project team. Risk register (incl. cost/schedule impact, mitigating measures, residual risk) in place. Funding agreements with European Commission, Government of the Netherlands and Global CCS Institute in place. Project execution plans in place. Status of Studies Various technical studies on all parts of the CCS value chain completed. Pre-FID project review by specialized GDF SUEZ subsidiary performed. Page 15

16 Experiences from the ROAD project: [1/3] reflecting on the framework ROAD skipped parts of identify / evaluate stage, e.g.: E.ON and GDF SUEZ power plants at Maasvlakte under construction Dutch political pressure against unabated coal Strong push to demonstrate CCS at Maasvlakte; no site selection capture Retrofit only technical option for capture P18 fields, suitable for CO 2 storage, operated by TAQA, nearby TAQA developing Bergermeer gas storage project (permitting) P18 selected: lowest cost solution with supportive partner Different business drivers and local circumstances different development approach / FED activities Page 16

17 Experiences from the ROAD project: [2/3] reflecting on the framework Strong tension between resolving key issues (funding, permits, sink), and managing cost and schedule, e.g.: Ideal approach would be to first secure sink and only then do capture FEED EEPR funding: costs over period of 5 years eligible and operation by 2015 required No time to first secure sink and only then start with capture FEED At this point in time (various capture technologies, environmental scrutiny), supplier selection has to be made before permit application Selecting capture supplier releases competitive pressure and increases cost (risk) Tension between key issues, cost and schedule challenge to sequence FED activities to achieve optimum result Page 17

18 Experiences from the ROAD project: [3/3] reflecting on the framework CCS Project Development Framework: required steps, logical sequence However: individual CCS projects face unique circumstances that make direct application of the framework difficult Challenge: how to make the framework customizable for individual projects? Which activities are required? In which sequence should activities be performed? Page 18

19 Recommendations Using the CCS Project Development Framework... Base development approach on business drivers and local circumstances Focus front-end development on what is required at FID, e.g.: Funding, permits, sink to be secured Capture (highest cost, after FID on critical path) Contracts ready for signature Engineer for high cost certainty Transport (costs project dependent but good price indices, little engineering) Engineer for permits, focus on special points (e.g. shipping lane crossings) Storage (low costs, several technical critical issues) Tackle critical issues (secure? volume? injectivity? commercial conditions?) Engineer for permits, not for cost certainty Page 19

20 Maasvlakte CCS Project C.V. Parallelweg NA Schiedam Page 20