Offshore CO2 EOR as Part of a National CCS Programme: Opportunities - PowerPoint PPT Presentation

Offshore CO2 EOR as Part of a National CCS Programme: Opportunities and Challenges David S Hughes Principal Reservoir Engineer/CCS and EOR Specialist Senergy 18th February 2014

Introduction • Substantially material prepared for a new SPE Distinguished Lecture (from September 2014) • Include more detail of recent UK CO2 EOR screening exercise undertaken for DECC (report available) • DECC/ PILOT/ Oil & Gas UK initiative • Presented to industry 1 October 2013 • For copy of ‘DECC Miscible Flooding’ report (8 MB) email david.hughes@senergyworld.com

Opening remarks: Geological Storage of CO2 • New business stream for oil industry • Store liquid/supercritical CO2 in depleted oil and gas fields and also in saline aquifers • Synergies with existing operations through reuse of infrastructure etc. and opportunity to increase hydrocarbon recovery • Contributes to the fight on climate change • Has value through Cap and Trade arrangements or through avoiding carbon taxes • But comes with regulations and liabilities • Uses all our skills

Outline of Talk • Worldwide requirement for CO2 emissions reductions and role of carbon capture and storage (CCS) • Specific UK targets • Expected amounts and locations of captured CO2 from national CCS programme • Types and locations of storage sites including estimate of UK CO2 enhanced oil recovery (EOR) potential • Challenges of implementing CO2 EOR offshore • Discussion

Worldwide CO2 Equivalent Emissions and Reduction Requirement Source: Adapted from UNDP, 2007 • Emissions reductions pathway consistent with limiting temperature rise to 2°C (1990 baseline) • 85% reduction in developed countries • 50% reduction overall

Inter-governmental Panel on Climate Change (IPCC) Fifth Assessment Report • From second order draft of the IPCC Working Group III contribution to the IPCC's Fifth Assessment Report (published in Economist 20 th July 2013) • Compares with 445-490 ppm giving likely rise of 2.0-2.4°C in Fourth Assessment Report

IPCC 2005 Prediction of Requirement for Carbon Capture and Storage (CCS) • From ~2030 amount of CO2 that requires to be stored is ~4 billion tonnes/year, rising to ~18 billion tonnes/year in 2095 • c.f. 4.0 billion tonnes/year oil production and 3.0 billion tonnes oil equivalent/year • 2030 gas production in 2011 From IPCC Special Report on Carbon Dioxide Capture and Storage 2005 and BP Statistical Review, 2012

European Union (EU) 2007 Prediction of Requirement for CCS • EU prediction suggests requirement for ~3 billion tonnes per year of CO2 storage

CO2 Flooding is a Major Enhanced Oil Recovery (EOR) Process in USA

USA CO2 EOR and CO2 Supply • ~120 projects • ~300,000 stb/d • ~75 million tonnes per year • 10 (CO2 capture)

UK Commitment to Reduction in CO2 Emissions • Under Kyoto Protocol, UK committed to reducing greenhouse gas emissions by 12.5% from their 1990 levels by 2012 – actually achieved 25.7% (provisional figure) • UK implemented legal requirement for 80% reduction in 1990 emissions by 2050, with interim target of ~34% by 2020 • Capture of CO2 emitted from fossil fuelled power plants seen as one means of reducing emissions, with geological CO2 storage in depleted oil and gas fields, and saline aquifers

Contribution to UK CO2 Emissions From Power Sector • UK CO2 emissions 2012 479 million tonnes • About 1/3 from fossil fuelled power stations • Many coal-fired power stations due to close • 12

UK Power Generation Prediction by Fuel (DECC, September 2013) 400 350 300 250 TWh/year 200 150 100 50 0 Coal Coal and Gas CCS Oil Gas Nuclear Renewables Storage From DECC – Updated Energy and Emissions Projections 2013, September 2013 (Reference Scenario)

CO2 Captured from CCS in UK Power Generation Prediction 18 16 Captured CO2 (million tonnes/year) 14 12 Late 2020s 10 Average ~12 mill te/y 8 6 4 2 0 Derived from DECC – Updated Energy and Emissions Projections 2013, September 2013 (Reference Scenario)

More Bullish Outlook for CCS in UK from Energy Technology Institute (ETI) • ETI predicts 35 million tonnes/year 2025-30 • Rising to 110 million tonnes/year 2035-50 Source: A Picture of CO2 Storage in the UK – learnings from ETI’s UKSAP and derived Projects, ETI, June 2013

ETI Appraisal of Sources and Potential Sinks of CO2 Around North Sea (Amounts in late 2020s) 10 mill te/y 15 mill te/y 10 mill te/y Source: www.co2stored.co.uk :

Southern North Sea (SNS) Gas Fields CO2 Storage Potential • 53 fields most Permian Leman Sandstone • Proven geological trap for hydrocarbon gas • Near to CO2 sources • Existing infrastructure • Well and pressure depletion may have compromised trap • Aquifer influx may reduce capacity • CO2 capacity ~2.8 billion tonnes

SNS Bunter Sandstone CO2 Storage Potential • 29 closed structures (2 under appraisal) • Good porosity (average 18.7%) and permeability • 650-9800 ft deep • Near to CO2 sources • Good seal (mudstones and evaporites) - gas bearing in places proves trap (or not!) • Some existing infrastructure • Cut by faults which may leak • CO2 capacity ~14.3 billion tonnes Material on SNS gas field and aquifer storage from: An assessment of carbon sequestration potential in the UK – SNS case study, Michele Bentham, January 2006, Tyndall Centre

ETI Appraisal of Sources and Potential Sinks of CO2 Around North Sea (Amounts in late 2020s) 10 mill te/y 15 mill te/y 10 mill te/y Source: www.co2stored.co.uk :

UK Oil Production and the EOR Prize 70 Cumulative oil (billion stock tank barrels) 60 50 Some fraction of remaining oil 40 Say 5 billion barrels 43% 30 37% 20 10 0 0 25 50 75 100 125 150 175 200 225 Oil field (largest to smallest STOIIP) Cum STOIIP (billion stb) Cum oil produced (billion stb) Cum ultimate oil recovery (billion stb)

How does CO2 EOR work? • CO2 acts as a solvent flushing oil from rock • Most efficient above the so called minimum miscibility pressure (MMP) • CO2 may be more or less dense than the oil, but always less dense than water • Efficiency of displacement is limited by heterogeneity and gravity override • Expected incremental recovery 5-15% of oil initially in place • Between 2 and 5 incremental barrels per net tonne of CO2 injected, but significant recycling of CO2 required

Screening for CO2 EOR Potential • All 119 UK fields with oil initially in place >100 MMstb screened (database made available by DECC) • Screening parameters considered include: • Ratio operating pressure/CO2 MMP • Ratio oil density/CO2 density • Ratio oil viscosity/CO2 viscosity • CO2 efficiency (stb/tonne) • Results are aggregated into overall score • Best candidates, 2 nd rank candidates and 3 rd rank candidates identified • Potential incremental recovery calculated

Estimated Incremental Recovery Potential and CO2 Stored by Category • Leading Operators (best and second rank candidates) • BP • Apache • Nexen • Talisman • Taqa Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)

Incremental Recovery Factor Distribution 77 fields 14 47 leading candidates 9 2 nd rank candidates 12 21 3 rd rank candidates 10 Number of Fields 8 6 4 2 0 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% Incremental Recovery Factor Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)

UK Potential for CO2 EOR (potential proportional to area of circles) 62 210 211 61 204 205 206 2 3 60 9 10 59 11 12 13 14 15 16 58 20 21 22 23 Latitude 57 28 29 30 56 55 113 42 43 44 54 110 47 48 49 53 -5 -4 -3 -2 -1 0 1 2 3 Longitude 3rd rank technical candidates 2nd rank technical candidates Best technical candidates Blocks coastline Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)

Initial CO2 Import Rate at 3% HCPV per year (No Hub Constraint, All Candidates) 77 fields 30 47 leading candidates 9 2 nd rank candidates 25 21 3 rd rank candidates 20 Number of Fields 15 10 5 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 Initial CO2 Rate at 3% HCPV per year (million tonnes) Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)

Decline in Potential in Operating Fields as Fields Reach their COP Dates • ~2/3rds of potential is in fields that will have ceased production by late 2020s 3500 3000 Incremental Recovery (MMstb) 2500 2000 1500 1000 500 0 <2013 total 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Best candidates Best and 2nd rank Best, 2nd and 3rd rank candidates Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)

Map Showing Agreements for Lease for CO2 Storage Granted by Crown Estate 59 11 12 13 14 15 16 Brae/Miller MacCulloch (Progressive) Balmoral area (Premier) Aspen (Petrofac) Maureen (Progressive) 58 Goldeneye (Shell) 20 21 22 23 St Fergus 57 28 29 30 Latitude Grangemouth Mid NS High (Progressive) 56 55 113 Teesside 42 43 44 Humberside Bunter 5/42 (NGC) Bunter 3/44 (NGC) 54 110 47 48 49 53 -4 -3 -2 -1 0 1 2 3 Longitude Offshore hubs Onshore hubs Blocks coastline Source: PILOT Miscible Gas EOR Workshop, October 2013 (DECC)