Carbon IN TRAnsportLaunching project scheme

Implementation of LLSC study key findings

Melbourne October 4th, 2011

Cees van der Ben & Michael Tetteroo

This document and all information contained herein are the property

of

VOPAK, Anthony Veder, Gasunie & Air Liquide

and are Strictly Confidential

Note

04-10-11 2

and are Strictly Confidential

It may not be copied or used without the written permission of

VOPAK, Anthony Veder, Gasunie & Air Liquide

Rotterdam Climate Initiative (RCI) city region CO2 reduction targets

-50%

vs 1990

04-10-11 3

vs 1990

by 2025

� CCS plays a mayor role in the Dutch national reduction targets in general and in the Rotterdam targets in particular.

NW-Europe allows for short links between sources and sinks

04-10-11 4

Several depleted gas fields become available and in due time incl. future aquifers: 50+ years of storage capacity for Europe.

Driving down costsSharing infra structure: simultaneously handling CO2

from multiple parties

Combining CO2 flows lies in the nature of CCS:

Power generation is responsible for 65%* of all green house gas emissionsPower generation is responsible for 65%* of all green house gas emissionsOECD/IEA Ref. Scenario 2006 2030

Total [TWh] 18921 33265 (+76%)

Coal 41% 44%

Nuclear 15% 10%

Renewables 18% 23%

���� Majority of sources are comparable regarding:

• Flow & conditions

• Compositions

• Characteristics

• Demands

*): Reference Scenario in 2005 & 2030: resp. 61% & 68 % in CO2 eq. terms

CINTRA logistic concept

04-10-11 6

• Bulk making/breaking for off shore CO2 storage• Intermediate Storage• Combine and link pipeline systems and barging/shipping routes: 4 routes• Provide independent custody transfer metering (for ETS)• Network building block (at rivers and coast lines)• Optimum CO2 : -50 ˚C, 7 bara

CINTRA’s CO2 Hub Partners

• Transport from the Emitters via pipelines or

barges

• Collection of CO2 to the CO2 Hub

• Loading of sea vessels / injection in trunk line

for transport to depleted offshore gas fields.

• Liquefaction at the Emitter’s

site or at the CO2 Hub

• Temporary Storage of CO2

04-10-11 7

• Locking the sea vessel to a floating turret or loading tower

linked with the sub-sea system of the depleted gas/oil field

• Injecting the CO2 into the porous rocks (depleted gas or oil

field or aquifers, at required temp’s and pressures

• As an alternative, mooring near a platform for discharging

the CO2 into a depleted field via the platform utilities

• Temporary Storage of CO2

• Connecting Hub to offshore

trunk line or transfer to

vessel

CO2 Hub Concept Advantages

• Multiple emitters linked with multiple sinks , increasing reliability of CO2 take-away

• Modular design allows easy volume related ramp up

04-10-11 8

• Variable destinations with liquid logistics

• Cost reduction through EOR

• Reduced project risk without onshore pipelines and onshore storage

How does it work

• MOVIE – will be shown during presentation

04-10-11 9

Hub Concept Organic Growth Model:Asset build up follows the volume build-up

Source 1 Source 2

1. Early scheme: single source flow too small to justify off shore pipe

Source 3 Source 4 Source n

3. Final mature scheme:multiple sources & sinks, both

12 2

3

04-10-11 10

Sink 1 Sink 1Sink 3: EOR

at oil fieldSink 2 Sink n

small to justify off shore pipe

2. Intermediate scheme: two combined flows do allow for an off shore pipe => ship moves into alternative CO2 or LPG service

multiple sources & sinks, both depleted reservoirs and EOR at production wells

1

2

Ship now could become pipe

line for 2 sources

2

Potentially ship that

used to sail on sink 1

33

Potential CO2 Sinks

K12B300 Mton CO2

capacity

EORProjects

Other

04-10-11 11

• First targeted sink: Dan Field Danish Continental Shelf, EOR Project Maersk Oil

• Hub forms a reliable CO2 source for EOR projects, allowing for a stable off take

• More contacts with other sink operators at the North Sea

• Potential CO2 from other ports will drive down costs for all participants further

Taqa

40 Mton CO2

capacity

CO2 from other ports

Rotterdam distance to sinks

• Dutch sinks are all within the 400 km range

• Rotterdam Ideally located

04-10-11 12

• Rotterdam Ideally located for North Sea distribution

• Offshore EOR potential significant

CO2 HubLegal/Contractual Framework

Emitter Rotterdam Cintra Sink Operator

SH

Providing a One-Stop-Shop

SH SH SH

Transfer of CO2 title

04-10-11 13

Emitter Rotterdam Cintra

Compression

& Transport

• CO2 title transfers from Emitter to sink Operator

• Transport organized via Service Level Agreements

LiquefactionBulk making

and terminal

Sea

Transport

Sink Operator

Necessary

sub-contracting

for other

specialized

services

CO2 HubLegal/Contractual Framework

• Emitters as CINTRA’s customers

• ETS allowances for Emitter

• CINTRA as multi-customer independent operator �no title to CO2

04-10-11 14

no title to CO2

• CINTRA Transportation Agreements: long term take-or-pay contracts

• TA’s and SLA’s based on repeatable formula

• Impartiality and transparency towards customers

• CINTRA has one TA per emitter, backed up by one SLA per JV partner each

Stakeholder Management

Purpose:Purpose:mitigate risks associated with negative public perception for CCS

Type of Risks:Type of Risks:1. Negative image for companies involved2. Delay in time

04-10-11 15

Steps to come to Stakeholder Strategy:Steps to come to Stakeholder Strategy:• Step 1: - Actor and network analysis• Step 2: - Inventarization communications and information options• Step 3: - Link actual communication option to key stakeholders• Step 4: - Execution in line with project development

2. Delay in time 3. Extra costs / investments to be made

beyond a first class SHE strategy

CO2 Hub Location

04-10-11 16

Connecting HinterlandBarges to CO2 Hub

Hub

Emitter

Emitter

04-10-11 17

• Liquefaction of CO2 at site

• River barges transport liquid CO2

over Rhine

• Cargoes from several sources can be

combined: economies of scale

• Capacity on Rhine is abundant vs.

pipeline hardly feasible

Emitter

Emitter

Current project status

• Launching emitters:– Coal fired power plant + post combustion capture 1.1 MTA– Hydrogen plant 0.4 MTA

• Launching sink: Maersk off shore EOR operation• Launching scope:

– On shore pipeline: 25 km, 40 bar– Terminal: 2.0 MTA liquefaction capacity, 20 kcbm LCO storage

04-10-11 18

– Terminal: 2.0 MTA liquefaction capacity, 20 kcbm LCO2 storage– Ships: 2 x 12 kcbm with onboard conditioning equipment– Off loading: double buoy system

• Timing:– LOI’s in place: Q4 2011– FID: Q3 2012– RFO: Q2 2015– Challenge: synchronize timing & permitting

• Expected 2025 throughput: total 8 MTA of which 15 MTA via barge

Launching Scheme

Dan Field on the Danish sector of the North Sea is operated by Maersk Olie og Gas AS on behalf DUC – Dansk Undergrunds Consortium.

04-10-11 19

Dan

CINTRA

• 1.5 MTA of CO2

• Rotterdam � Denmark• EOR

GCCSI LLSC study lessons learned to date

General• Start engineering at the sink• Minimize CO2 composition requirements• Combining multiple emitters in one network is technically feasible. • No metallurgical/corrosion issues found other than water => dry the

CO2 at the sourceSHE

04-10-11 20

SHE• No items of concern encountered• Low vessel collision risk due to high LCO2 density• On shore pipeline through busy areas: 40 barCompression• Up to 100 bar: bull gear compressor ; beyond: pump• Moderate ambient temperatures: no power consumption difference

between conventional compression or compression/liquefaction/pumping.

Pipeline• In dense phase in order to minimize costs

GCCSI LLSC study lessons learned to date

Costs: contract duration

04-10-11 21

� Pipeline system tariffs are hurt the most by short term contracts

Source: IEA GHG, 2004

Transportation Costs: insight evolution

LNG CO2

04-10-11 22

CO2 CO2

GCCSI LLSC study lessons learned to date

Costs

• CO2 transportation is to be considered as a regular infra structural project: 20+ year contract durations

• CO2 liquefaction’s energy intensity is relatively low => cost break even distances are

04-10-11 23

cost break even distances are1. for on shore pipe versus barge: 200 km (and not 1500 km)

2. for off shore pipe versus ship: 150 km (and not 750 km)

• Depending on flow and distance the transportation costs may vary from 20 to 120 €/ton

• Combining multiple emitters in one system is paramount to make CCS affordable, especially for industrial (smaller) emitters

GCCSI LLSC studylessons learned to date

Legislation• Biggest remaining uncertainties:

– CO2 custody transfer: who, when and to whom– Monitoring requirements in the mean time

Barging/shipping• No CO2 venting/re-liquefaction in transit• Barge max. LOA 135 m → 150 m in the future• Max barge size Ruhrgebiet → R’dam: 7500 tonnes (Ruhrgebiet →

04-10-11 24

• Max barge size Ruhrgebiet → R’dam: 7500 tonnes (Ruhrgebiet →Karlsruhe: 6000 tonnes)

• Required ship sizes: 10,000 - 30,000 m3

• Ship min. required off loading temperature: 0 ˚C• � sea water suffices as heat source for LCO2 “vaporization”Ship off loading• HP pressure CO2 unmanned off loading: technically feasible at acceptable

uptimes in deep and shallow water.• Depleted reservoir’s existing wells require retubing• Ship → sink batch injection technically feasible, multiple wells likely to be

required flow wise.• Tubing: low temperature material of construction.

0

50

100

150

200

250

300

350

400

450

0 2 4 6 8 10 12 14 16

Sh

ip m

an

ifo

ld p

ressu

re (

bara

)

• Depleted gas field NS • Stand alone operation•Stay above hydrate formation bottom hole temperature: 13 ˚C

• Challenges: � all solvable� Intermittent flow � Pressure over sink life time:

150 – 400 bar at well head

The offshore scope - shipping

0

0.5

1

1.5

2

2.5

3

3.5

0

50

10

0

15

0

20

0

25

0

30

0

35

0

40

0

45

0

50

0

55

0

60

0

65

0

70

0

75

0

80

0

85

0

90

0

95

0

Sh

ip tra

nsp

ort

ca

pa

city [m

mt/yr]

10,000 cbm ship

30,000 cbm ship

Distance [nm]• Loading & discharge 2000 t/hr• Sailing speed 15 kts• Voyage related spare 1 day

04-10-11 25

25

0 2 4 6 8 10 12 14 16

Time line (years)

THANK YOU

04-10-11 26

QUESTIONS?