Proposed Study for Capturing and Storing CO 2 from Power Generation Activity in Egypt in Conjunction with Enhanced Oil Recovery in Stranded Oil Wells

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1 The World Bank / ESMAP/IEA WORKSHOP ON Carbon Dioxide Capture and Storage (CCS) Capacity Building & Technology Development: Needs and Opportunities in Developing Countries Monday, September 14, 2009 The World Bank Main Complex- Washington DC, USA Proposed Study for Capturing and Storing CO 2 from Power Generation Activity in Egypt in Conjunction with Enhanced Oil Recovery in Stranded Oil Wells Prepared by: Eng. MAHER AZIZ BEDROUS Counsellor for Energy, Environment & Climate Change Egyptian Electricity Holding Company 1

2 Project Document Project number: Project title: Comprehensive Study for Capturing and Storing CO 2 from Power Generation Activity on Suez Gulf in Conjunction with Enhanced Oil Recovery in Stranded Oil Wells. Estimated start date: Estimated end date: Executive Agency: Ministry of Petroleum Project Site: Beneficiary Country: Egypt Beneficiary Sectors: Petroleum Sector, Electricity Sector and Ministry of State for Environmental Affairs Funding: US$ million (fund made available through technical assistance) 2

3 Project Document (Contd.) Brief Description: The overall objective of this project is to develop opportunities for carbon capture and storage in Egypt. In order to achieve this objective, the study for capturing and storing CO 2 aims to provide technical and financial assistance to Egypt, in order to: 3

4 Project Document (Contd.) Brief Description (Contd.) : Evaluate the prospects and opportunities of CO 2 capture from industrial activities currently releasing large quantities of CO 2 to the atmosphere, such as power generation, and its sequestration in Geological Structures in conjunction with Enhanced Oil Recovery in stranded oil wells. 4

5 Project Document (Contd.) Brief Description (Contd.) : This evaluation will include, but is not limited to, the following aspects: Geographic and geological distribution of the stranded oil wells. Site screening and selection process for CO 2 storage. 5

6 A. EGYPT'S VISION AND ACTIVITIES 1. Egypt's Climate Change Institutional Framework Egyptian Environmental Affairs Agency (EEAA) was established as the highest authority in Egypt responsible for promoting and coordinating all efforts related to environmental protection. In July 1997, with the appointment of a special Minister for Environmental Affairs, the Government of Egypt (GoE) demonstrated yet further commitment. 6

7 1. Egypt's Climate Change Institutional Framework (Contd.) As of 1996, Egypt participated in the Climate Change Info / Web with UNFCCC secretariat. In October 1997, a special unit was established within the Egyptian Environmental Affairs Agency that is solely responsible for climate change issues. 7

8 1. Egypt's Climate Change Institutional Framework (Contd.) Several organizations are extensively involved at the national level in climate change related activities. These include: Environmental organizations; Energy related organizations; Research Centers; Universities; Governmental Organizations and national laboratories; and Non-Governmental Organizations. 8

9 1. Egypt's Climate Change Institutional Framework (Contd.) These multi-layer climate change institutional arrangements already play a leading role in integrating climate change issues in the national agendas. 9

10 2. Inventory of Greenhouse Gas Emissions As for Greenhouse Gases inventory, the Initial National Communication (INC) estimated that the total GHG emissions of Egypt in 1990 were equal to around 116 million tons of CO 2 equivalent. 10

11 2. Inventory of Greenhouse Gas Emissions (Contd.) The Second National Communication (SNC) study has already started in late As per the estimate for the GHG inventory today, Egypt's inventory of GHG emissions may reach around 255 million tons of CO 2 equivalent. 11

12 3. Vulnerability to Climate Change Egypt's large and dense packed population makes the country extremely vulnerable to climate change. Egypt does not produce enough food to feed its current population. Its water resources are rather limited. Moreover, its Nile delta is seriously threatened by sea level rise. The vulnerabilities are examined on agriculture, coastal zone management, aqua culture, human habitat and settlements, and water resources and possible adaptation measures are surveyed. 12

13 3. Vulnerability to Climate Change (Contd.) Meanwhile, the indirect impacts are perceived to include factors like demographic dislocation and socio-economic disruptions. 13

14 4. Effort to Combat Climate Change Among the positive steps undertaken with the support of international donor agencies, are the multitude of projects in various phases of implementation. 14

15 4. Effort to Combat Climate Change (Contd.) A number of mitigation options have been assessed for Egypt through the Strategic National Action Plan (SNAP), Global Environment Facility (GEF) and the Building Capacity Projects. Mitigation actions to reduce CO 2 mainly cover the energy and industrial processing sectors, while those for CH 4 mainly cover the agriculture/livestock and waste sectors. 15

16 4. Effort to Combat Climate Change (Contd.) Carbon Dioxide Capture and Storage (CCS) is considered, today, one of the most important options for reducing atmospheric emissions of CO 2 from anthropogenic activities. There is a need for assessing the current capabilities of the country regarding technical, scientific, environmental, economic, institutional and social dimensions of CCS and to place CCS in the context of other options of the portfolio of the potential climate change mitigation and adaptation measures. 16

17 5. Petroleum Sector's Facilitation The Ministry of Petroleum, as the main beneficiary of enhanced oil recovery and the actual owner of depleted oil wells will represent a core Egypt group on brining required technical assistance for implementing this study project. 17

18 5. Petroleum Sector's Facilitation (Contd.) The Ministry of Petroleum will give support in initiating contact and building partnerships with Government concerned sectors, nongovernmental organizations (NGOs) and civil society, private sector, and academia to offer support. It will further facilitate the implementation of the project by: 18

19 5. Petroleum Sector's Facilitation (Contd.) Obtaining technical backstopping and capacity building to Egypt on activities related to the implementation of the CCS study project. Identifying and facilitating finance and assisting in the implementation of the study phases. Build partnerships, strengthen networks, raise awareness, and initiate CCS project activity within the context of its international commitments. 19

20 B. POTENTIAL DEMAND FOR CCS ASSESSMENT The technical maturity of specific CCS system components vary greatly. Some technologies are extensively deployed in mature markets, primarily in the oil and gas industry, while others are still in the research, development or demonstration phase. Current maturity of CCS system components include industrial separation (capture), pipeline (transportation), Enhanced Oil Recovery (EOR) (geological storage) and industrial uses of CO 2. 20

21 B. POTENTIAL DEMAND FOR CCS ASSESSMENT (Contd.) Geological storage for Enhanced Oil Recovery is the most viable CCS system component for application in Egypt, supported by industrial separation in the field of power generation activity for capturing CO 2 and pipeline for transportation. 21

22 B. POTENTIAL DEMAND FOR CCS ASSESSMENT (Contd.) These CCS system components are eligible for implementation today, if Egypt provided with technological and financial support as well as appropriate building for necessary capacity needs and capabilities. 22

23 B. POTENTIAL DEMAND FOR CCS ASSESSMENT (Contd.) Oil exploitation and production have been early started in Egypt, since more than one hundred years ago. Most of oil exploitation, extraction and production industry was first concentrated in and around to the Suez Gulf and on the northwestern part of the Red Sea coast. Later on, oil discoveries and extraction have extended to the northern areas of the western desert of Egypt. 23

24 B. POTENTIAL DEMAND FOR CCS ASSESSMENT (Contd.) Many of these oil wells have become of a great need for enhanced recovery, particularly on the Gulf of Suez (See the following map). Also, large quantities of CO 2 are currently released to the atmosphere from power generation activity on the Suez Gulf and other locations could be captured today, pipelined and stored in geological formations of stranded oil wells (CO 2 emissions during 2005 have reached 2.6 million tons from Ataka power plant (900 MWe) and 2.2 million tons from Ayoun Mousa power plant (640 MWe)), and 2 million tons from Suez Gulf BOOT Power Plant). 24

25 B. POTENTIAL DEMAND FOR CCS ASSESSMENT (Contd.) Potential opportunities for implementing EOR technique using CO 2 capture and storage methodology are great in Egypt, but mainly needs an extensive assessment for implementation which requires transfer of technology, transfer of financial resources and support for capacity building. Also, geological storage of carbon dioxide as well as injection of carbon dioxide into deep seabed geologic formations need to be thoroughly assessed. 25

26 Oil Fields Gas Fields 26

27 C. BENEFICIARIES The beneficiaries of this project will be the national and local government policy makers, planners and managers in various relevant economic sectors, and the main actors engaged in development work (government, international research and development institutions and funding agencies, non-governmental organizations, local communities, etc.). 27

28 C. BENEFICIARIES (Contd.) The sectors on a preliminary list proposed for the study works and capacity-building activities are: Petroleum Sector Electricity Sector Environmental Sector These three sectors are the most concerned to participate. 28

29 D. IMMEDIATE OBJECTIVES, OUTPUTS AND ACTIVITIES General Objectives The general objectives of the study are: To provide a basic analysis to the Country's potential for CCS activities. To develop options and opportunities for CCS consolidated projects. 29

30 Specific Objectives The specific objectives are: To provide a comprehensive assessment to the Country's potential for CCS activities. To develop a portfolio of projects to be implemented in the area of CCS. 30

31 Specific Objectives (Contd.) In order to achieve these objectives, the proposed study will include: 1. Assess cost and benefit of the CCS activity options by quantifying the potential tasks to be executed and assessing the related cost of implementation. 2. Develop the national policy framework portfolio related to the CCS in conjunction with EOR and examine potential opportunities in the context of the national development goals. 31

32 Specific Objectives (Contd.) 3. Facilitate and develop a national understanding of CCS and promote economic sectors and community participation. 4. Assess and evaluate the opportunities created by the international society for CCS projects. 5. Design of domestic CCS rules, assess the possible participants, establish appropriate guidelines for CCS measures preparation, monitoring, and reporting. 32

33 Specific Objectives (Contd.) 6. Identify regulatory, institutional and capacity building requirements for CCS in the country to make the CO 2 capture strategy works. 7. Develop a portfolio of possible CCS projects and investigate international cooperation opportunities. 33

34 Specific Objectives (Contd.) IN ORDER TO ACHIEVE THESE OBJECTIVES, THE PROPOSED STUDY WILL INCLUDE, BUT IS NOT LIMITED TO, THE FOLLOWING ASPECTS: ISSUES FOR SELECTION AND CHARACTERIZATION Location, geographical and geological factors Historical uses of the area Existence of amenities, biological features and uses of the sea DATA AND ANALYSIS TO FACILITATE THE EVALUATION Water depth, structure depth Nearness to population centers Regional geology, hydrogeology, stratigraphy and structure Regional tectonics and seismicity Faults and fractures Man-made structures active and abandoned wells well integrity with respect to CO2 All relevant ecological factors, including land uses and sea uses. 34

35 Specific Objectives (Contd.) IN ORDER TO ACHIEVE THESE OBJECTIVES, THE PROPOSED STUDY WILL INCLUDE, BUT NOT LIMITED TO, THE FOLLOWING ASPECTS (Contd.): Reservoir / seal evaluation Geological interpretation stratigraphic interpretations and well-log cross sections of the reservoir intervals reservoir/seal heterogeneity temperature, pressure, fluid composition (salinity) Geophysical mapping 3-D maps of potential migration pathways (faults) structure and thickness of reservoirs and cap rocks Petrophysics permeability, relative permeability (injectivity) porosity capillary pressure mineralogy 35

36 Specific Objectives (Contd.) IN ORDER TO ACHIEVE THESE OBJECTIVES, THE PROPOSED STUDY WILL INCLUDE, BUT NOT LIMITED TO, THE FOLLOWING ASPECTS (Contd.): Hydrodynamics displacement of formation water Sealing capacity of caprocks capillary entry pressure Geomechanics and geochemistry CO 2 water rock interaction stress, stiffness and strength Reservoir simulations short-term behaviour: reservoir response (pressure changes for a given injection rate) Long-term behaviour: reservoir containment 36

37 Specific Objectives (Contd.) IN ORDER TO ACHIEVE THESE OBJECTIVES, THE PROPOSED STUDY WILL INCLUDE, BUT NOT LIMITED TO, THE FOLLOWING ASPECTS (Contd.): Marine environment Characterization Ocean current and see floor topography in the region Physical and chemical characteristics of sediments and overlaying waters: ph benthic fluxes of CO 2 nutrients and other substances (potential contaminants/pollutants) Biological communities and biological resources composition, structure, dynamics Areas of special scientific or biological importance sanctuaries fishing areas Economic factors Economic feasibility Impact on other resources such as oil and gas 37

38 Specific Objectives (Contd.) The evaluation process will, also, comprise a risk assessment implementation process for CO 2 Sequestration in Sub-Seabed Geological Structures (CS-SSGS). This risk assessment process will include, but is not limited to: 38

39 Specific Objectives (Contd.) characterization of the risks to the marine environment from CS-SSGS on a sitespecific basis. collection of the necessary information to develop a management strategy to address uncertainties and any residual risks. 39

40 Specific Objectives (Contd.) For realizing this, the Risk Assessment and Management framework will comprise the following six stages: 1. Problem Formulation 2. Site Selection and Characterization 3. Exposure Assessment 4. Effects Assessment 5. Risk Characterization 6. Risk Management 40

41 Specific Objectives (Contd.) Major issues to be addressed include: the suitability of deep geological reservoirs to retain the CO 2 reliably for long periods; the nature of the overburden to act as a barrier to prevent or retard upward migration of CO 2 should leakage occur; the nature of the marine environment above the site of CS-SSGS in relation to concerns with potential adverse effects of any CO 2 from the reservoir that succeeds in reaching it; 41

42 Specific Objectives (Contd.) the need for records associated with the authorization and licensing process, together with monitoring data; and depending upon the depth of the water column into which leakage of CO 2 from the underlying sediments could potentially occur, differing exposure and effects regimes will be relevant. 42

43 Specific Objectives (Contd.) Generic conceptual models of potential environmental pathways and effects that are relevant to the consideration of the potential consequences of CO2 release to the marine environment from CS-SSGS will be considered, as depicted in Figures 1 and 2. 43

44 Figure 1 - Effects in risk assessment framework

45 Figure 2 -Conceptual model of potential environmental pathways and effects * Exposure and effects assessment of the displacement of saline water by injection steam may be required. The sites of these displacements into the marine environment can be at great distances from the injection site, depending on the geological circumstances.

46 Specific Objectives (Contd.) Elements which are critical to definition of the geographic volume to be reviewed for Risk Management Procedures will include, among others, the following factors: 1. regional and local geology; 2. regional stratigraphy; 3. regional structure; 4. regional hydro-geological conditions; 5. seismic history; 6. injection and confinement zone properties; 7. hydrology of underground sources of potable and/or irrigation water if present/relevant; 8. flow properties of the injection layer; and 9. determination of the vertical hydraulic gradient. 46

47 Specific Objectives (Contd.) Collection of this information in areas where there has been previous hydrocarbon exploration & production is essential. Essential elements of process monitoring and control include: 1. the injection rate; 2. continuous pressure monitoring; 3. injectivity and fall-off testing; 4. the properties of the injected fluid (including temperature and solid content, the presence of substances other than CO2 and the phase of CO2); and 5. mechanical integrity. 47

48 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING Work on the study is expected to begin in December The draft final report for the Study will be available by July, 15 th The final report for the study will be presented and discussed in a workshop to be held in the Country, August The workshop will be organized by the Country side, as part of the proposed project. 48

49 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) Ministry of Petroleum will assist in preparing the workshop as seems appropriate. The comments received during the Workshop and in the review process will be incorporated in the Final Report for the study. Final report will be completed by September

50 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) The study will be made available in English and will be published in Arabic (National language), if necessary. 50

51 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) The study will be financed by the Donor through the Ministry of Petroleum, with a contribution, in kind, by the Government of Egypt. The level of effort for each task for both the Country's and the international consultants will be developed upon execution. 51

52 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) The proposed study will be conducted by outstanding Country's and international experts who will be contracted through two separate contracts. The main positions in the study team will consist of: (1) a Project coordinator, (2) an expert in geographical and geological factors, (3) an expert in historical uses of the study area, (4) a technology specialist, (5) an expert in existing amenities, biological features and uses of the Suez Gulf, 52

53 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) (6) a reservoir / seal evaluation expert, (7) an expert in marine environment characterization, (8) power generation expert, (9) petroleum production expert, (10) risk assessment specialist and (11) an economic feasibility expert. Those experts will be drawn from international and Country's experts in the field of climate change according to the level of efforts that be elaborated upon execution and other experts as deemed necessary. 53

54 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) A Project coordinator will be appointed from the team of Country's experts, whose main task will be to ensure an efficient coordination between the international teams of experts as well as provide the proper interface with the Steering Committee, the petroleum authority, the electricity sector and the Country's Environmental Authority. The detailed terms of reference for the Project Coordinator will be determined upon execution. 54

55 E. TIME SCHEDULE, PROJECT TEAM AND FUNDING (Contd.) Institutional Arrangements The study will be managed, supervised and monitored by a Steering Committee organized under the umbrella of the Ministry of Petroleum. Estimated Budget is around US$ million. 55

56 Finally we ask the W.B. to support implementation of the Study via providing finance using one of the Bank s Carbon Funds such as: The Strategic Climate Fund (including the Pilot Program for Climate Resilience) 56

57 57