The Integration of CO 2 Transportation and Sequestration Calgary, Alberta March 27, 2008

Transcription

1 Calgary Chamber of Commerce The Integration of CO 2 Transportation and Sequestration Calgary, Alberta March 27, 2008 Chuck Szmurlo Vice President, Energy Technology & Power Generation Enbridge Inc.

2 Enbridge Overview Covenas OCENSA Bogotá Spain Colombia Enbridge Inc. is a leader in energy transportation and distribution in North America and internationally: Owns and operates the world s longest crude oil and products pipeline system Owns and operates Canada s largest natural gas distribution company Interest in 80,000 km of pipelines Delivers 2 MM B/D of liquids Handles 5 BCF/D of gas Net wind power capacity of 215 MW Employs 5000 people

3 CO 2 Mind Map Carbon Credit Trading

4 CO 2 Transportation Strategic Drivers The public increasingly sees global warming as the cause of calamities Pine beetles Weather phenomena Flooding and drought Industry (particularly energy) is perceived as The largest cause of greenhouse gas emissions Financially capable of a remedy as a consequence of high energy prices Legislation will likely mandate direct action Dissatisfaction with overseas offsets Potential for carbon tax CO 2 credit costs to exceed $15/tonne CCS for new 2012 oil sands and coal facilities EOR and Sequestration not always proximate to major emissions

5 CO 2 Supply and Demand Points Fort Nelson Duke Energy Zama Apache Swan Hills / Judy Creek Penn West Devon Pengrowth Management Joffre Penn West Joffre NOVA Pembina Penn West ARC Redwater ARC Fort McMurray Suncor / Syncrude Imperial Shell Nexen ConocoPhillips CNRL Husky Petro-Canada Edmonton / Ft. Saskatchewan EPCOR / TransAlta Shell Scotford Sherrit Dow Chemical Agrium Regina CCRL Atikokan Ontario Power Generation Thunder Bay Ontario Power Generation Lakeview Ontario Power Generation Lennox Ontario Power Generation Brooks / Taber Husky Medicine Hat Canadian Fertilizers Ltd. Weyburn / Midale EnCana Penn West Apache Lambton Ontario Power Generation Nanticoke Ontario Power Generation CO 2 Source Current / Potential EOR Flood Sarnia Shell Chemicals - Basell Sunoco Imperial

6 Potential Pipeline Corridors CO 2 Source Current / Potential EOR Flood

7 CO 2 Backbone Pipeline Connection of sources and sinks via Backbone Pipeline Nearer term likely driven by EOR projects 5,500 Add spur lines, as required, for CO 2 inputs or offloads (5,500) 2,510 Longer term ability to connect to sequestration opportunities EOR Site 98+% C0 2 Source (4,500) 1,310 Backbone could be extended eastward, when required (1,500)

8 Enhanced Oil Recovery Illustrative CO 2 Demand Profile Tonnes per Day 8,000 7,000 Fort McMurray 6,000 5,000 4,000 Snipe Lake Swan Hills S. Swan Hills Judy Ck. Virginia Hills Pembina Edmonton Red Deer 3,000 2,000 1, Illustrative Demand Profile Calgary EOR project economics are thin: Individually small volume for initial infrastructure CO 2 demand profile build-up/fall-off

9 Preparing CO 2 for Pipeline Need about 90% CO 2 purity for liquid transport Collection and dehydration of CO 2 at source CO 2 compression for entry into the pipeline 2200 psi Compression & dehydration is about 1/3 the total cost for CO 2 pipeline transportation

10 Illustrative CO 2 Pipeline Cost Curve $/Mscf Inch 8 Inch 10 Inch 12 Inch Assumptions: mile pipeline, 50 mile min station spacing - Canadian Prairie type construction conditions - Piping rate to 2160 psi, 80% design factor - Delivery pressure of 2160 psi provided by Enbridge -CO 2 Critical "Pipelining" Conditions" : ~ pressures must be maintained above 1080 psi ~ temperatures must not exceed 83 o F 3.00 ($21/tonne) (MMscfd) Flow Rate (tonnes/d)

11 Potential Project Schedule Preliminary Customer Commitments Illustrative Project Schedule Firm Customer Commitments Order Materials Construction Permit Earliest In-Service Class 3 Estimate Detailed Engineering Pipeline Construction Line Fill Regulatory/Environmental Studies File Regulatory Permits Three year time horizon to build pipeline infrastructure

12 Need to Integrate Pipeline Sequestration CO 2 volume reductions will likely be much larger than EOR requirements Millions tonnes CO 2 per year Sequestration will be necessary to meet Government targets Repository for EOR CO 2 surplus

13 CO 2 Sequestration Pilots Alberta Saline Aquifer Pilot (ASAP) Enbridge, EPCOR and PTAC launched November, participants Government funding identified Project Aquistore-Saskatchewan Petroleum Technology Research Centre

14 ASAP Project Description Phase 1: 2008, $750,000 (Participants $20k/each, Federal & Provincial) Identify 3 specific saline aquifer locations Design and cost (± 30%) a sequestration demonstration including CO 2 compression and transportation Prepare preliminary application for saline lease/permit and approval for demonstration pilot Phase 2: 2009/12, $30 - $50MM (Technology Funds, Participants, Western Economic Dev., Federal & Provincial) Construct & operate demonstration pilot ( tonnes/day) Phase 3: 2013, $100 - $200MM (Operators for commercial return) Expand to commercial operation

15 Issues with Backbone Pipeline Cost of capture, compression, transportation and sequestration in the $60 - $85 per tonne range Insufficient EOR demand to meet CO 2 reduction targets EOR demand might be captured by point and shoot CO 2 pipelines from Genesee, Fort Saskatchewan etc. Need another piece of useful work for Ft. McMurray CO 2 to offset costs

16 Useful Work for CO 2 Food product and commercial applications Carbonated beverages refrigerants, fire extinguishers Enhanced oil recovery miscible flood reduces oil viscosity Slurry agent to transport solids via pipeline More effective than water 80% solids by weight vs. 50% for water Delivers products dry

17 CO 2 Slurry Pipeline Overview A slurry pipeline could transport CO 2 and petroleum coke from Ft. McMurray oil sands upgraders to SAGD operations 5,500 Abundant coke and CO 2 Integrate CO 2 coke slurry pipeline with oxyfuel combustion or coke gasification to provide SAGD steam 98+% C0 2 Source Sequestration Site Sequester additional CO 2 after coke is burned

18 CO 2 Slurry Pipeline Overview Fort McMurray Bitumen Upgraders SAGD Operations Steam SAGD Operator CO2 CO2 Capture Coke Petroleum Coke Oxyfuel or Gasification Steam Generation CO2 Steam SAGD Bitumen Bitumen Coke Slurry Preparation CO2 Slurry Pipeline CO2/Coke Separation CO2 Sequestration SAGD Void Markets (Domestic & Int l) Coke by rail CO2 CO2 Pipeline to EOR or Sequestration

19 CO 2 Slurry Pipeline Slurry pipeline might extend to Fort Saskatchewan Provide hydrogen for refineries and upgraders from coke gasifiers Displace natural gas currently used in steam methane reforming 98+% C0 2 Source Sequestration Site 5,500

20 CO 2 Slurry Pipeline Might deliver petcoke for blending with coal at existing coal plants Remove CO 2 for EOR and Sequestration Deliver petcoke to rail junctions to access world markets 98+% C0 2 Source Sequestration Site 5,500

21 Coke and CO 2 Supply In 2006, Suncor and Syncrude produced more than 20,000 tons of coke per day enough energy (btu content) to produce 500,000 b/d based on a steam to oil ratio of 3:1 Current SAGD production is 300,000 b/d and is forecasted to be 1.1 billion b/d by 2015 Suncor and Syncrude produce ~5,500 tons per day of CO 2 from their Benfield hydrogen plants at 20% by weight CO 2, implies a coke transport capacity of 27,500 tonnes b/d

22 Proposal Benefits CO 2 from Ft. McMurray does useful work Transporting solids as it moves to sequestration sites Stranded coke displaces natural gas for steam for SAGD CO 2 injected into reservoir frees up gas over bitumen Pressure maintenance and EOR May be able to batch coke, limestone and sulphur and access world markets Excess CO 2 can be sequestered in nearby saline aquifers Establishes a modular transport component of an eventual backbone pipeline

23 Slurry Pipeline Challenges Expenses of capturing CO 2 at Ft. McMurray Obtaining buy in from SAGD and power plant operators to undertake costly plant modifications Oxyfuel combustion & gasification technology Managing Petcoke combustion emissions Adequate sequestration sites for surplus CO 2

24 Conclusions CO 2 pipelines to EOR and sequestration a likely outcome Must integrate sequestration with EOR Saline aquifers best for large volume sequestration Useful work for CO 2 could be key to offsetting CCS costs Slurry Pipelines delivering coke, limestone and sulphur could be a viable alternative for Ft. McMurray s CO 2 transportation