Technical Workshop CSLF Mid-year Meeting, 2 nd May 2017, Abu Dhabi, UAE Industrial CCUS in the UAE I-Tsung Tsai Department of Engineering Systems and Management Masdar Institute of Science and Technology Abu Dhabi, UAE 1
Agenda CO 2 -EOR potential in UAE CO 2 -EOR drivers for UAE CCUS challenges for UAE Perspectives & next steps 2
UAE Population and CO 2 Emissions 3
Abu Dhabi GHG Inventory by Source (2012) Source: Environmental Agency, Abu Dhabi (2016) 4
Abu Dhabi GHG Emission Factors Source: Abu Dhabi Quality and Conformity Council (2015), Abu Dhabi Technical Report - Greenhouse Gas Emissions Factors, pp. 10. 5
Abu Dhabi CO 2 Emissions and Reduction Targets (2012) Source: Environmental Agency, Abu Dhabi (2016) 6
Back of Envelope Calculation of CO 2 Utilization Potential in Abu Dhabi for CO 2 -EOR Scenario Conventional EOR+ Advanced EOR+ Maximum Storage EOR+ Description Miscible WAG flood with vertical injector and producer wells in a five spot or similar pattern. Operational practices seek to minimise CO 2 use. Miscible flooding following current best practices optimised for oil recovery. May also involve some second-generation approaches that boost utilisation and recovery. Miscible flooding where injection is designed and operated with the explicit goal of increasing storage. Could include approaches in which water is removed from reservoir to increase available pore volume. Data: IEA (2015) Incremental recovery (% OOIP) Utilization (tco 2 /bbl) 6.5 0.3 13 0.6 13 0.9 AD oil production (bbt/day) 3 M at 2016 expected to expand to 3.5 M by 2020 CO 2 Utilization Potential (tco2/yr) 329 M (2016) 383 M (2020) 657 M (2016) 767 M (2020) 986 M (2016) 1,150 M (2020) - ESI Project: 0.8 M tco 2 /yr - Total CO 2 emissions: 115 M tco 2 at 2012 Presenter s estimates 7
CCUS Regulatory Gaps in the GCC Regulatory domain Bahrain Kuwait Oman Qatar KSA UAE CO 2 classification X X X X X X Ownership of surface facility X X X Transboundary CO 2 X X X X X X EIA CO 2 impurity X X X X X X CO 2 capture regulation X X X CO 2 transportation regulation X X X CO 2 storage regulation* X X X X X X Liability during the post-closure period X X X X X X Regulation for CCS with EOR X X X X X X Incentives Little (or no) progress after Nov 2013 review. Kuwait Environmental Protect (EP) Law No. 42 of 2014 includes GHG as subject of regulation, enacting a EP funds under EPA (not specific to climate action). No classification of GHG. X 8
Intended Nationally Determined Contribution (INDC) Inclusion of CCUS as mitigation measures: Country CCS CO 2 -EOR Bahrain X Kuwait Oman X Qatar Saudi Arabia X X UAE X INDCs proposed before COP21; CCS accepted as part of future CDM during COP22. Bahrain, Qatar, Saudi Arabia, and UAE emphasized Decision 24/CP.18: Economic diversification with mitigation co-benefits as central pillar of climate action. All emphasized financial, technology transfer and capacity building. Saudi Arabia: CCUS technology development as a response measure. 9
State-led UAE Green Agenda 10
SOE Number by Industry and Countries (2014) Bahrain Kuwait Oman Qatar Saudi Arabia Primary sector Oil and gas 1 1 2 1 4 9 Secondary Telecom 1 1 1 1 2 2 8 sector Utilities 1 1 5 7 (infrastructure) Transport 2 1 3 Secondary sector (resource intensive) Secondary sector (technology intensive) Tertiary sector (service) UAE Agriculture 5 5 Steel 1 1 Aluminium 1 1 2 Petrochemical 1 1 2 1 1 6 Cement 1 2 3 General industry 2 1 2 1 6 Aviation 1 1 2 Automobile 1 1 Military 1 4 5 Shipbuilding 1 1 Semiconductor 1 1 Real estate 1 1 2 Finance 2 3 4 2 8 10 29 Airlines 1 1 1 1 1 2 7 Total 7 14 10 11 20 36 Tsai I., Kaya A. (2016) Economic Diversification and the Emergence of Inclusive Economic Institutions in the Gulf Cooperation Council States, Institutions, Citizens and the State: Convergence and Divergence in the GCC, IB Tauris, 118-143. Total 11
CO 2 Sources under Direct State Influence 12
Key CO 2 -EOR Drivers for UAE Internal: Sustain Oil production at lower CO2 emissions (clean fossil fuel). Free up gas from gas-eor Diversify economy Source: US EIA External: Carbon credits via CDM? 13
CO 2 -EOR Deployment Factors in UAE Institutions - Explicit legislation on state ownership of fossil fuel assets - No explicit regulation for CCS/CO 2 -EOR Stakeholders - CO 2 suppliers: industrial State Owner Enterprises (SOEs) - CO 2 users: National Oil Company (i.e. ADNOC) Operations - Economy: feasible in the ESI project under current oil price - Challenge: large scale deployment 14
Major Challenges in Large Scale Deployment Deploying Most Cost-competitive Technology Optimal injection means Optimal infrastructure network CO 2 -Water-Oil-Gas-Renewables-Nuclear-Food Interactions Cost-Revenue-Risk sharing schemes (business model) 15
Cost: Significant Learning Cure Effects in CO 2 -EOR Technology Next-generation CO 2 -EOR technology Features: Improve reservoir characterization. Optimize injection well layout and flood design Real time operation optimization. Performances: Improves oil recovery efficiency by 50% More efficient use of CO2 + higher recovery rate greater number of offshore oil fields becoming economically viable. Source: US DOE National energy technology Laboratory report, 2014 16
Competing Injection Means for EOR in GCC Alternative methods: gas, water, thermal, chemical, polymer, etc. Key decision factors of injection method: Reservoir characterization Existing recovery method Availability of injection means Amal West (Oman): solar-eor Ongoing EOR projects in Oman: Harweel Field (miscible gas) Qarn Alam Field (thermal) Mukhaizna Field (thermal) Marmul Field (polymer) Amal Field (thermal) New development: Kuwait: steam-eor for Wafra field; 80,000 bbl/d by early 2017. UAE: ADNOC & Wintershall MOU on chemical-eor. Saudi Aramco: evaluating miscible gas-eor in addition to CO2-EOR. 17
Optimal Infrastructure Network Oil/gas actives in the western region New Desalination capacity in the eastern region Ongoing research subject at the Masdar Institute 18
CO 2 -Oil-Gas-Power-Water-Food Nexus Renewables CO 2 -EOR Oil Power Nuclear Fossil Fuel production gas Water Industry gas-eor Household Agriculture 19
Conclusions CCUS in UAE Now driven primarily by internal rationale (i.e free up gas for EOR) versus external incentives (e.g. carbon credits) focus will be on oil-max versus CO 2 -max. Currently part of a state dominated industrial eco-system. No immediate urgency for explicit regulations: CO 2 -EOR: collaboration achievable among SOEs upon acceptable cost/revenue sharing rules. CCS: lack of clear business models. Discrete decisions on technologies to deploy are critical. Summary: CCUS can be a beneficiary of UAE economy diversification strategy if carefully structured and when proper policy and technology are in place. Actions needed Quantifying the economy of CO 2 -EOR and CCS on levelized basis with pilot projects. Developing clear technological roadmaps for local conditions. Clarifying strategic relationships between CO 2 -Oil-Gas-Water-Renewables-Nuclear-Food. Identifying optimal infrastructure network. Identifying business model and optimal regulation to extend from CO 2 -EOR to CCS. Sharing data for best practice. 20