Abu Dhabi's $3 Billion Carbon-Capture Project Likely to Go on Stream by 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hydrogen Energy (Surrey, United Kingdom), a joint venture between BP plc (NYSE:BP) (London) and Rio Tinto plc (NYSE:RTP) (London), is developing the world's first commercial carbon capture and sequestration/storage (CCS) project in Abu Dhabi. The goal is to develop a countrywide CCS network to capture carbon dioxide from factories and manufacturing plants in the United Arab Emirates and direct the gas toward enhanced recovery from oil fields.

The $3 billion project is expected to come on stream by early 2013. It is currently in the front-end engineering and design stage, undertaken by Foster Wheeler (NASDAQ:FWLT) (Clinton, New Jersey). Hydrogen Energy and the Abu Dhabi Future Energy Company Masdar (Abu Dhabi, United Arab Emirates) will jointly finance the project, but investment patterns are yet to be decided. The firms are expected to set up a local joint-venture organization to implement the project. SNC-Lavalin (TSX:SNC) (Montreal, Quebec) is conducting the feasibility study for the project to assess options for capturing carbon dioxide emissions from offshore and onshore industrial facilities in the country, delivering gas to oil fields, as well as further operations for enhanced oil recovery.

Carbon dioxide emissions from the power sector are reported to account for 40% of the total emissions worldwide. The captured gas will be compressed, dehydrated and transported through pipelines to storage sites near oil fields. It will then be injected into aging oil fields to enhance oil recovery by maintaining pressure. Natural gas that is conventionally used to maintain pressure in oil fields would then be diverted toward domestic consumption or exported. As the oil is forced out of the fields, carbon dioxide remains trapped in the earth, which functions as a natural impervious seal.

Recovery levels are known to be as high as 2.5 barrels to 3 barrels of oil per ton of carbon dioxide injected. The project is likely to capture 50 million tons of carbon dioxide during its life span of 25 years and is estimated to increase the recoverable oil reserves of Abu Dhabi by about 2 billion barrels. The project will initially capture about 2 million tons per year of carbon dioxide after operations begin in early 2013.

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