The New Player In Town


Qatar Today - - COVER STORY -

Ajoint ven­ture by Mas­dar and the Abu Dhabi Na­tional Oil Com­pany, Al Reyadah is the re­gion's first ded­i­cated CCS com­pany fo­cused on com­mer­cial­i­sa­tion. When its CCS plant of­fi­cially went on­line in Novem­ber last year at the Emi­rates Steel In­dus­tries, it be­came the first large-scale project to cap­ture CO₂ from a steel man­u­fac­tur­ing plant. Speak­ing to Qatar

To­day, the CEO of Al Reyadah, Arafat Al Yafei, says the plant will cap­ture 800,000 tonnes of CO₂ an­nu­ally, which will be used for EOR at the Ru­maitha oil fields, help­ing ADNOC save on the nat­u­ral gas that is tra­di­tion­ally used for this pur­pose.

“There are dif­fer­ent solutions be­ing pro­posed to limit tem­per­a­ture rise to be­low 2°C, with CCS and en­ergy ef­fi­ciency be­ing on top of the list and ex­pected to play a very im­por­tant role to achieve this,” Al Yafei says. Al Reyadah com­pany rep­re­sents a per­fect ex­am­ple of a prac­ti­cal ini­tia­tive for a sus­tain­able CCS so­lu­tion for cli­mate change. “Un­der ADNOC and Mas­dar, Al Reyadah Com­pany is go­ing to play a cru­cial role to es­tab­lish CCS solutions on busi­ness terms and pro­mote de­vel­op­ments for CCS in­dus­try, which will even­tu­ally sup­port larger CCS im­ple­men­ta­tions on the global scale.”

Al Yafei be­lieves that the CCS busi­ness is a real need have due to the fact that the re­gion's huge oil and gas fields are in­creas­ingly see­ing more of EOR de­vel­op­ment schemes, where CO₂ util­i­sa­tion will be­come a key com­po­nent. There are a num­ber of fu­ture op­por­tu­ni­ties that they will be look­ing at. “As it is a new busi­ness, we work se­ri­ously with out part­ners to eval­u­ate the op­por­tu­ni­ties and con­duct the re­quired due dili­gence from mul­ti­ple as­pects. Mean­while, we are pro­ceed­ing in build­ing the ca­pa­bil­i­ties to­wards cre­at­ing a CCS in­dus­try in the re­gion that con­sid­ers new tech­nolo­gies, busi­ness as­pects and worlds chal­lenges. Time is im­por­tant to en­sure that these projects are done cor­rectly in or­der to meet the busi­ness ob­jec­tives in the lo­cal and re­gional mar­kets,” he says.

“Right now a util­i­sa­tion strat­egy linked with oil com­pa­nies and EOR is the most vi­able way to im­ple­ment large scale CCS in our re­gion,” Al Yafei says. “Our aim here at Al Reyadah is to pre­pare the plat­form, set an ex­am­ple, and build ex­per­tise in the busi­ness. We ini­tially want to show govern­ments and in­dus­tries that CCS is tech­ni­cally and com­mer­cially vi­able. Even­tu­ally this will be ex­panded to other kinds of util­i­sa­tion, be it in bev­er­age in­dus­tries or food preser­va­tion or med­i­cal uses. If we can demon­strate a rev­enue stream, there will be an up­take in the CCS busi­ness. Just sub­si­dies will not be enough to make this con­cept sus­tain­able as we have seen in the past,” he says.

For the time be­ing, the new CCS plant is able to cap­ture most of the steel plant's CO₂ emis­sions, which is pro­cessed and trans­ported to the oil fields for EOR. How­ever, this vol­ume is not even near the po­ten­tial de­mand that is es­ti­mated for ADNOC CO₂ EOR plans. Ac­cord­ingly, Al Reyadah is work­ing closely with ADNOC and its part­ners to en­sure the next CCUS projects are aligned to en­sure timely im­ple­men­ta­tion. “The fu­ture cap­tured CO₂ vol­umes will also be directed to­wards EOR as the re­quire­ment in this area is huge.”

If done right, Al Reyadah can set a re­gional ex­am­ple of the elusive CCS busi­ness case that we have been look­ing for. “All par­ties in­volved in the Al Reyadah CCUS ini­tia­tive are ben­e­fit­ing in one way or the other. ADNOC is able to ob­tain the CO₂ it needs while si­mul­ta­ne­ously sup­port­ing the global en­vi­ron­men­tal ini­tia­tives. Mas­dar on the other hand is the cat­a­lyst com­ing from a re­new­able/clean en­ergy busi­ness, while Emi­rates Steel, an in­ten­sive en­ergy utiliser, emit­ting a lot of car­bon has be­come the first steel plant in the world to pro­duce free car­bon steel which has a mar­ket­ing advantage [Green Steel],” Al Yafei points out. From where he sits, it's a win-win sit­u­a­tion all around.

“HIGH COST AND LACK OF GOOD BUSI­NESS MOD­ELS RE­MAIN THE MA­JOR CHAL­LENGES TO THE DE­PLOY­MENT OF CCS IN THE RE­GION AT THIS MO­MENT.” DR I-TSUNG TSAI As­sis­tant Pro­fes­sor De­part­ment of En­gi­neer­ing Sys­tems and Man­age­ment Mas­dar In­sti­tute

to be de­com­mis­sioned. Sure, CCS is ex­pen­sive now but the net cost of good pol­icy is ul­ti­mately neg­a­tive, Page says. “As we in­vest in it, it's go­ing to get bet­ter and cheaper.”

“When you look at cost curves of avail­able clean tech­nolo­gies, hy­dro, en­ergy ef­fi­ciency and on­shore wind are al­ready ex­tremely cost-ef­fec­tive. The cost of so­lar PV is com­ing down quickly and CCS will fol­low soon af­ter, trailed by other cur­rently less ad­vanced tech­nol­ogy like con­cen­trated so­lar PV. Ob­vi­ously the cheap­est ones will be adopted first but they won't get you far enough. In the next 3-5 years, as more coun­tries are called upon to in­crease tar­gets and am­bi­tions, they will be chal­lenged as to what else they are go­ing to de­ploy. That's where CCS will come rid­ing into play and that will also drive its costs down.”

Win­ning the pub­lic de­bate

It's dif­fi­cult to deny that CCS is yet to win the hearts and minds of the pub­lic as a vi­able green so­lu­tion. This is partly be­cause there is a sig­nif­i­cant gap in per­cep­tion about how ready the tech­nol­ogy is; many still con­sider it ex­per­i­men­tal and not ready for com­mer­cial­iza­tion. The fi­nan­cial fea­si­bil­ity of CCS is also of­ten called into ques­tion. And it is ar­gued that every dol­lar of pub­lic money that goes into fund­ing or sub­si­diz­ing CCS is one dol­lar lost to re­new­able en­ergy projects. CCS is also viewed as an en­cour­age­ment to bring more coal plants on­line and pro­long fos­sil fuel use.

Now, the 100% re­new­ables fu­ture is def­i­nitely pos­si­ble and it is surely com­ing. But no one can pre­dict with any cer­tainty when it will be there. All en­ergy pro­jec­tions we have now show hy­dro­car­bons as part of the en­ergy mix for sev­eral decades to come and though their share will con­tin­u­ally fall, it will not be as fast as we need it to be. “Fos­sil fu­els are go­ing to be with us for a long time to come,” Al Falih said dur­ing the panel dis­cus­sion at COP22. “The move away from hy­dro­car­bons will be a long jour­ney that re­quires huge in­vest­ments and a lot of tech­nol­ogy and in­no­va­tion. In the mean­time, green­house gas emis­sions are at an un­ac­cept­able level and we have to find abate­ment mea­sures. And one of the key tools in our tool­box is CCUS; we can't make the tran­si­tion with­out it.”

This isn't just the opin­ion of the en­ergy min­is­ter of a ma­jor oil pro­ducer but stark facts. “To be hon­est, there is no ret­i­cence on the part of the power in­dus­try glob­ally to move to­wards a 100% re­new­able fu­ture,” says Page. “Let's be re­al­is­tic about how fast we are go­ing to get there. I don't think it's go­ing to be in the next ten years. In 2040, we are still go­ing to be de­pen­dent on fos­sil fuel for 70% of our power. It's in­con­ve­nient but we have to deal with it.”

To in­crease pub­lic aware­ness and dis­cus­sion about CCS it's im­por­tant to pro­vide clear and care­ful ex­pla­na­tions of the is­sues at stake. Pub­lic ac­cep­tance and en­gage­ment are crit­i­cal el­e­ments of any de­vel­op­ment project. The 15 projects cur­rently in op­er­a­tion around the world have not en­coun­tered sig­nif­i­cant op­po­si­tion and, in some in­stances, are cel­e­brated by the com­mu­ni­ties in which they are lo­cated be­cause time and ef­fort were com­mit­ted in en­gag­ing with lo­cal com­mu­ni­ties, es­pe­cially those lo­cated close to stor­age sites. “We have a re­spon­si­bil­ity to ac­tu­ally ed­u­cate peo­ple a whole lot bet­ter,” says Page. “The pub­lic also needs to see a strong, well-recog­nised reg­u­la­tory frame­work around CCS, so we know that it is not ad hoc and has been well thought out.”

The fact the CCS is seen as a “false so­lu­tion” pro­posed by hy­dro­car­bon com­pa­nies and economies is also hurt­ing its im­age among those fight­ing cli­mate change. Only a few days be­fore COP22, the Oil and Gas Cli­mate Ini­tia­tive was an­nounced. Un­der this pro­gramme, 10 oil ma­jors in­clud­ing Saudi Aramco, Bri­tish Petroleum and Sta­toil have com­mit­ted to spend $1 bil­lion over the next 10 years on re­duc­ing car­bon emis­sions. A large por­tion of this in­vest­ment will go to­wards CCS. For many, this con­firms their worst sus­pi­cions. “For now CCS is con­sid­ered an un­sta­ble strat­egy for cli­mate change mit­i­ga­tion. En­vi­ron­men­tal NGOs think that CCS is a strat­egy for oil pro­duc­ing economies to sus­tain global con­sump­tion of fos­sil fu­els,” says Dr I-Tsung Tsai, As­sis­tant Pro­fes­sor in the De­part­ment of En­gi­neer­ing Sys­tems and Man­age­ment at Mas­dar In­sti­tute. “That ar­gu­ment is dif­fi­cult to break. But


if fos­sil fuel use can be made sus­tain­able, it can help peo­ple in very low-in­come coun­tries de­velop. But ul­ti­mately these peo­ple have no bar­gain­ing power in the in­ter­na­tional arena to help lobby on be­half of these tech­nolo­gies,” he says.

Show me the busi­ness case

CCUS can be quite rel­e­vant to coun­tries in the MENA re­gion for three rea­sons – the vast oil and gas fields pro­vide ex­cel­lent CO₂ stor­age sites in the or­der of 60 Gt; car­bon stor­age via EOR may con­trib­ute to oil re­duc­tion while re­duc­ing CO₂ emis­sions; and CO₂ for EOR sub­sti­tutes gas for EOR and in­creases the out­put of gas as a valu­able prod­uct.

De­spite this, reg­u­la­tion around CCS in the GCC is nonex­is­tent. In any case most CCS-re­lated ac­tiv­i­ties are re­lated to na­tional oil com­pa­nies which have never been ex­plic­itly reg­u­lated. How­ever, the lack of reg­u­la­tion is not the key fac­tor that blocks CCS de­ploy­ment, says Dr Tsai. “Lack of reg­u­la­tion is a re­sult of lack of good busi­ness mod­els (so there is no in­cen­tive to in­tro­duce CCS leg­is­la­tion and reg­u­la­tion). In the GCC, cost and good busi­ness mod­els re­main the ma­jor chal­lenge to the de­ploy­ment of CCS in the re­gion up to this mo­ment.”

Dr Tsai also points out that while the uil­i­sa­tion of cap­tured car­bon in oil re­cov­ery is en­tic­ing, the process is com­pli­cated, which might ex­plain why oil com­pa­nies in the re­gion haven't em­braced it more en­thu­si­as­ti­cally. “Specif­i­cally, even though the tech­nol­ogy for cap­tur­ing CO₂ from spe­cific in­dus­trial pro­duc­tion pro­cesses is not re­gion­spe­cific, op­ti­mal in­jec­tion of CO₂ is highly reser­voir­spe­cific. As a re­sult, lo­cal test­ing of CO₂ in­jec­tion and stor­age is crit­i­cal,” he says. “CO₂-EOR in­tro­duces fur­ther tech­ni­cal chal­lenges: for ex­am­ple, how to in­cor­po­rate CO₂EOR into ex­ist­ing EOR prac­tice (e.g. wa­ter flood­ing, wa­ter al­ter­nat­ing gas in­jec­tion).”

How­ever, he main­tains that the key chal­lenge now for GCC coun­tries is to get the eco­nom­ics right (min­i­miz­ing the cost) so we can iden­tify the fea­si­ble busi­ness mod­els even with­out ex­tra in­cen­tive (such as CCUS for Clean De­vel­op­ment Mech­a­nism). “We need to find a good rev­enue flow to con­vince a busi­ness that is al­ready in op­er­a­tion. Retrofitting this new ma­chin­ery may be dif­fi­cult due to space and tech­nol­ogy con­straints; power gen­er­a­tion


is the ma­jor source of CO₂ emis­sions in the re­gion. How are we go­ing to find eco­nomic value for them?” asks Dr Tsai.

This is prob­a­bly why Qatar does not have large-scale CCS projects like KSA and UAE even though it has been one of the re­gional lead­ers in CCS re­search. “Qatar has ini­ti­ated very large re­search pro­grammes such as the Qatar Car­bon­ate and Car­bon Stor­age Re­search Cen­tre (QCCSRC). Qatar also es­tab­lished a Qatar CCS Multi-scale Imag­ing Lab­o­ra­tory in Im­pe­rial Col­lege Lon­don. As CO₂EOR is not as im­por­tant to Qatar as it is to UAE and Oman, it is rea­son­able that the Qatari gov­ern­ment takes a wait-and­see ap­proach on CCUS, as there ex­ists a life cy­cle loss from de­ploy­ing in­ef­fi­cient tech­nol­ogy rather than im­ple­ment­ing a high-ef­fi­ciency tech­nol­ogy,” ex­plains Dr Tsai.

Qatar is pre­pared

There is a high de­gree of con­fi­dence that global stor­age re­sources are more than ad­e­quate to ac­com­mo­date fu­ture re­quire­ments, even un­der highly am­bi­tious sce­nar­ios. For ex­am­ple, es­ti­mated ge­o­log­i­cal stor­age re­sources in the United States is be­tween 2,376 Gt and 21,000 Gt, around 1,500 Gt in China, and 78 Gt in the United King­dom. To put this in con­text, the cu­mu­la­tive global stor­age re­quire­ments be­tween now and 2050 in the 2C sce­nario are 94 Gt. How­ever, fur­ther work is re­quired to con­vert this the­o­ret­i­cal stor­age ca­pac­ity into “bank­able”, prac­ti­cal stor­age fa­cil­i­ties, where there is a high de­gree of con­fi­dence that de­sired amounts of CO₂ can be in­jected at de­sired rates.

This is where the likes of QCCSRC come in. Funded by Qatar Petroleum, Qatar Science and Tech­nol­ogy Park and Shell, the cen­tre is headed by Dr Martin Blunt. The 10-year pro­gramme with an over­all bud­get of $70 mil­lion was tasked with un­der­stand­ing CO₂ stor­age in a Qatari or Mid­dle-Eastern con­text, i.e., the process of in­ject­ing CO₂ deep un­der­ground into car­bon­ate rocks which are the most preva­lent kind in Qatar. This in­volves the study of rock prop­er­ties, how CO₂ can be trapped within the sub­mil­lime­tre gaps in por­ous rocks, stor­age in de­pleted oil and gas field, fluid-rock in­ter­ac­tions, etc. While the re­search is based in Im­pe­rial Col­lege Lon­don, sev­eral Qatari PhD stu­dents are in­volved in look­ing at the un­der­ly­ing science of car­bon stor­age. While not di­rectly in­volved in demon­stra­tive project or site iden­ti­fi­ca­tion in Qatar, Blunt says their work at the cen­tre will be able to pro­vide the sci­en­tific info nec­es­sary for some­one in Qatar to im­ple­ment a CO₂ stor­age scheme with con­fi­dence.

Eight years in, the cen­tre has been able to enor­mously


ad­vance the un­der­stand­ing of car­bon­ate ge­ol­ogy. Dr Blunt says “We are cer­tainly at a stage where we can pro­vide valu­able in­for­ma­tion for a stor­age project.” Shut­ting down talk about CCS still be­ing ex­per­i­men­tal, he says the bar­ri­ers to global im­ple­men­ta­tion are not sci­en­tific but are rather po­lit­i­cal, le­gal and fi­nan­cial bar­ri­ers. “The con­sen­sus among sci­en­tists is that our un­der­stand­ing of the process is of­fi­cially evolved to a point where it can be rapidly im­ple­mented at scale. There is no big tech­ni­cal prob­lem that we can't over­come. It only needs the po­lit­i­cal will, money and le­gal frame­work.”

This is prob­a­bly why Dr Blunt shares the frus­tra­tion of the sci­en­tific com­mu­nity and in­dus­try ex­perts who feel we are not ap­ply­ing CCS as rapidly as we could. “We want to be do­ing this now but the progress is ag­o­niz­ingly slow. We have to start hav­ing more demon­stra­tive projects that in­volve the full cy­cle, from col­lect­ing CO₂ from power sta­tions or in­dus­trial sites, pip­ing it to stor­age sites and in­ject­ing it un­der­ground. We need to learn by do­ing; build up ex­pe­ri­ence and ex­per­tise.”


The Al Reyadah CCS plant at Emi­rates Steel In­dus­tries

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