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Tariq Siddiqui's picture
COO, Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
  • 136 items added with 95,245 views
  • Nov 9, 2022
  • 514 views

 

Key Insights

  1. Time to invest in CO2 is now. Following trends in CO2 storage are observed
    • 1-More CCUS projects moving offshore
    • 2-More  CCS projects are moving to saline aquifer storage, away from low hanging fruit (CO2-EOR) storage
    • 3-Newer developments are moving hard-to-abate industries to test and pilot technologies
    • 4-Newer developments are targeting hub types development moving away from stand-alone projects
    • 5-Most $70 billion investment though still will be in low-cost-capture industries
    • 6-USA remains the most attractive markets, although China & Europe are introducing policy support frameworks 
    • 7-Business mode will like to move to Transporter model to scale-up more mature market ( regional hub)
    • 8- Fewer demonstration & pilot test in STORAGE industry.  CO2-EOR and Saline Aquifer are TRL 9 mature technologies, only Depleted Oil & Gas field storage is under trial and will soon mature.
    • 9- Technology challenges lie upstream in Captur industry, not in Storage.
  2. CCUS (CO2 removal project) are most suitable, only for low cost capture industries (natural gas processing, Hydrogen/Ammonia, Ethanol, petrochemical) when coupled with CO2-EOR and/or Saline Aquifer  storage, especially in USA that has many such facilities, infrastructure for CO2, history of CO2/eOr application and government incentives like 45Q.  In these application its commercial.  Emission foot-print of this commercial market ~ 0.5 GtCO2 per annum.
    • -Investment opportunity here is $70 billion alone in these four industries ti 2030.
  3. The second more relevant application is in hard-to-abate industries (iron & steel, Aluminum, Petroleum refining etc)where the cost of capture is  very high due to very low CO2 concentration in process stream. Costs of capture has to come down in these industries as there is no other alternative to CCUS. The emission foot-print of this industry ~ 3.5 GtCO2 per annum. 
  4. Power generation market is the largest source of emissions ~ 11 GTCO2 per annum. It has minimum $50/tonne cost of capture. Only a small fraction of emission can be removed (~1.5 GtCO2 per annum) using CCUS.  Power generation industry must either rely on avoidance projects (Solar PV, Wind, Hydrogen) to generate power or reduce consumption by switching; coal-to-gas and gas-to-h2 (blending). 

 

BOTTOMLINE

Time to invest in commercial CCUS as well as development testing is now.

 

 

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