Complex Made Simple

Carbon technology boosts Abu Dhabi oil

Ambitious investment projects now under way are set to prove that carbon capture and storage is a viable substitute for the vast amount of natural gas currently re-injected into oil reservoirs. Abu Dhabi anticipates that its $15bn Masdar Initiative to advance renewable energy use will see commercially viable projects made reality in the near future.

In January, the state-owned Abu Dhabi Future Energy Company (ADFEC) joined up to develop hydrogen-fuelled power with Hydrogen Energy, a joint venture between BP Alternative Energy and Rio Tinto.

The facility will process around 100 million cubic feet-a-day of natural gas, creating hydrogen and CO2. The hydrogen will be used to generate 420 megawatts of low-carbon electricity, enough power to provide more than 5% of all Abu Dhabi’s current power generation capacity.

The move to form Hydrogen Energy followed eight months of research by Canada’s SNC-Lavalin that examined onshore and offshore CO2 capture from industrial facilities in Abu Dhabi, as well as the possible delivery of the CO2 to oil field operators for enhanced oil recovery. The study provides a roadmap to develop a comprehensive carbon capture network in Abu Dhabi, the UAE and potentially link it with similar schemes across the region.

Eliminating emissions

The venture envisages that the drawn off gaseous CO2 will be injected into oilfields where the carbon dioxide will be used instead of natural gas to maintain reservoir pressure. Aside from aiding in oil recovery, the sequestered carbon will eliminate emissions, equal to the amount currently produced by all the cars now driven in Abu Dhabi.

The use of carbon dioxide in the management of oilfields was illustrated by a successful experiment in 2005 which piped CO2 from a goal gasification plant in North Dakota to Canada’s Wayburn oilfield in Saskatchewan province. Pressure in the oilfield’s reservoir was increased raising crude production by 10,000 barrels-a-day.

For Abu Dhabi, the world’s fifth largest oil producer, such benefits are enticing. A fully developed network could reduce Abu Dhabi’s annual CO2 emissions by up to 50% while simultaneously increasing oil production up to 10% and also free up large quantities of natural gas currently re-injected into Abu Dhabi’s oil reservoirs.

However, it’s not going to be cheap. A carbon capture and storage network is expected to cost up to $3bn. According to SNC-Lavalin the project would be the largest of its kind ever attempted.

Kyoto Protocol

Abu Dhabi intends to recoup some of the investment by monetising greenhouse gas emission reductions in compliance with the Kyoto Protocol’s clean development mechanism (CDM).

The CDM is a project-based mechanism governed and audited by the UN and provides fiscal incentives to reduce greenhouse gas emissions in developing countries by turning emission reductions into traded assets or carbon credits.

The global market for carbon credits is projected to grow to $25bn over the next five years. Analysts say around 15% of this is likely to be earned within the Middle East since the UAE and other Gulf states are in a position to fast track CDM projects.

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