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| Titel |
Off-shore enhanced oil recovery in the north sea: matching CO2 demand and supply given uncertain market conditions |
| VerfasserIn |
Tine Compernolle, Kris Welkenhuysen, Kuno Huisman, Kris Piessens, Peter Kort |
| Konferenz |
EGU General Assembly 2015
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| Medientyp |
Artikel
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| Sprache |
Englisch
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| Digitales Dokument |
PDF |
| Erschienen |
In: GRA - Volume 17 (2015) |
| Datensatznummer |
250113630
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| Publikation (Nr.) |
 EGU/EGU2015-13847.pdf |
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| Zusammenfassung |
| Introduction
CO2 enhanced oil recovery (CO2-EOR) entails the injection of CO2 in mature oil fields in order to mobilize the oil. In particular, the injected CO2 reduces the oil’s viscosity and acts as a propellant, resulting in an increased oil extraction rate (Leach et al., 2011). Given uncertainty in both oil price and CO2 price under the EU ETS system, aim of this study is to analyze under which economic conditions a CO2 exchange can be established between a CO2 supplier (an electricity producer for whom CO2 is a by-product) and a CO2 user (an offshore oil company that exploits oil fields in the North Sea and needs CO2 for enhanced oil recovery).
Methodology
A techno-economic simulation tool, PSS IV, was developed to provide investment decision support on integrated CO2-EOR projects (Welkenhuysen et al., 2014). Until now, a fixed onshore supply of CO2 was presumed. An economic optimization model is now developed for both the CO2 producer and the CO2 user. Because net present value and discounted cash flow methods are inadequate to deal with issues like uncertainty and the irreversibility of an investment decision, the real options theory is applied (Dixit and Pindyck, 1994). The way in which cooperation between the companies can take place, will be studied using game theoretical concepts (Lukas and Welling, 2014). Economic and technical data on CO2 capture are available from the PSS database (Piessens et al., 2012). Data on EOR performance, CO2 requirements and various costs are taken from literature (BERR, 2007; Klokk et al., 2010; Pershad et al., 2012).
Results/Findings
It will be shown what the impact of price uncertainty is on the investment decision of the electricity producer to capture and sell CO2, and on the decision of the oil producer to make the necessary investments to inject CO2 for enhanced oil recovery. Based on these results, it will be determined under which economic conditions a CO2 exchange and transport can take place. Furthermore, also the role of the ETS system will be discussed. In an initial stage, only the CO2-price and oil price market uncertainties are considered. In a further stage, uncertainties from the supply side (technology) and EOR (geological) will be added.
References
BERR. 2007. Development of a CO2 transport and storage network in the North Sea: report to the North Sea Basin Task Force.
Dixit A, Pindyck R (1994). Investment under Uncertainty. In, Princeton University Press.
Klokk Ø, Schreiner PF, Pagès-Bernaus A, Tomasgard A (2010). Optimizing a CO2 value chain for the Norwegian Continental Shelf. Energy Policy 38(11): 6604-6614
Leach A, Mason CF, Veld Kvt (2011). Co-optimization of enhanced oil recovery and carbon sequestration. Resource Energy Econ 33(4): 893-912
Lukas E, Welling A (2014). Timing and eco(nomic) efficiency of climate-friendly investments in supply chains. Eur J Oper Res 233(2): 448-457
Pershad, H., Durusut, E., Crerar, A., Black, D., Mackay, E. & Oldern, P., 2012. Economic Impacts of CO2-enhanced oil recovery for Scotland, Final report for Scottish Enterprise. Element energy, London.
Piessens, K., Welkenhuysen K., Laenen, B., Ferket, H., Nijs, W., Duerinck, J., Cochez, E., Mathieu, Ph., Valentiny, D., Baele, J.-M., Dupont, N. & Hendriks, Ch., 2012. Policy Support System for Carbon Capture and Storage and Collaboration between Belgium-the Netherlands “PSS-CCS”, Final report. Belgian Science Policy Office, Research Programme Science for a Sustainable Development contracts SD/CP/04a,b & SD/CP/803, 335p.
Welkenhuysen, K., Compernolle, T., Piessens, K., Ramírez, A., Rupert, J. & Swennen, R., 2014. Geological uncertainty and investment risk in CO2-enhanced oil recovery. 12th International Conference on Greenhouse Gas Control Technologies (GHGT-12), Austin, Texas, 05-09/10/2014. |
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