Whether you are an advocate of global warming or a sceptic, carbon emissions are a crunch issue globally and there[ds_preview] is now almost universal acceptance that so-called greenhouse gas emissions are damaging the planet. Scientists estimate that some 28 billion tonnes of carbon dioxide are pumped into the earth’s atmosphere every year, largely a result of industrial activity and man’s love affair with the motor car.
As the pace of industrialisation in some of the world’s most populous countries rises exponentially, the scale of the carbon emission challenge will only increase in the years ahead. And some pretty far-reaching strategies are under development to tackle the issue.
The transportation industry is itself a major source of emissions. Despite the fact that ocean and coastal shipping carries most of the world’s trade in volume terms and yet functions mostly on poor fuel from the very bottom of the oil barrel, it is significantly more environmentally friendly than other transport modes. Now though, shipping could be set to provide a key role in offsetting carbon emissions, providing a vital service in the carbon capture and storage (CCS) transport chain.
CCS is a relatively new concept which is being developed to capture carbon dioxide at major industrial sites such as power stations, steel mills and other industrial plants, and then to transport it to suitably secure permanent storage locations underground, thereby preventing release of the gas into the atmosphere. Many scientists believe that unless carbon dioxide emissions are seriously constrained, irreversible damage in the form of global warming will have catastrophic repercussions on mankind.
The future ocean transportation of carbon dioxide was the subject of a recent London conference organised by Riviera Maritime Media. The first industry gathering on this evolving topic, delegates heard that large volumes of carbon dioxide are likely to be transported in the future and both ships and pipelines will have key roles to play in its supply chain linking sources and storage sites.
The choice of transport mode will depend upon a number of key variables, delegates were told, including cargo volumes, voyage distances, power plant seasonal load profiles, intermediate cargo storage facilities along the supply chain, offshore cargo transfer arrangements and the impact of all of these issues on gas carrier design.
Dr Jeff Chapman is chief executive of the London-based Carbon Capture & Storage Association established in 2006 to promote the business of capture and geological storage of carbon dioxide. Its members aim to reduce emissions whilst also taking up opportunities to enhance oil and gas production. They include specialist companies in manufacturing and processing, power generation, engineering and contracting, oil, gas and minerals as well as support services including law firms, banks and consultancy companies.
According to Dr Chapman’s Association, carbon capture and storage is the only technology which allows the continued use of fossil fuels without associated environmental damage because the CCS process removes approximately 90 % of carbon dioxide emissions associated with burning fossil fuels.
Dr Chapman says that the concentration of carbon dioxide in the world’s atmosphere is now about 380 parts per million. But the level is rising by around two parts per million every year and, from today’s level of about 380, the 450 parts per million level – widely viewed as a critical watershed – is only a relatively short time into the future.
Dr Chapman quotes the International Energy Agency which has stated that the world will need to have built at least 3,400 carbon capture installations by 2050, involving the capture of 11 bn t of carbon dioxide every year. »To put this in context,« he wrote recently, »there are currently a mere handful of commercial scale CCS projects operating in the world, capturing less than 5 mill. t a year.«
The handful of projects to which Dr Chapman refers include the Sleipner project in the Norwegian North Sea, Snøhvit in the Barents Sea, Weyburn in Canada and In Salah in Algeria. But many more are planned and could provide an exciting new revenue stream for the world’s gas ship owners over the next decade and beyond.
North Europeans are amongst those at the forefront of the complex CCS technology. StatoilHydro, for example, led the way with its carbon dioxide storage project at the Sleipner gas field where hydrocarbons with a carbon dioxide content of about 9 % have the gas removed before shipment to shore. Around one million tonnes of carbon dioxide are then stored in a deep saline reservoir 1,000 metres below the sea floor.
The Norwegian oil company has also initiated a CCS project at the Snøhvit gas field where the liquid natural gas produced has a carbon dioxide content of 5–8 %. Commissioned in 2008, about 700,000 tonnes of carbon dioxide are stored each year in saline reservoirs offshore, around 2,600 m under the sea bed.
In Canada, carbon dioxide is captured from the lignite-fired Dakota Gasification Company synfuels plant in North Dakota and piped 205 km to the Williston Basin oilfield (Weyburn) in Canada where it is used to boost production. In operation since 2000, some 20 mill. t of carbon dioxide will eventually be stored there.
Meanwhile BP, working with Algeria’s national oil company Sonatrach and StatoilHydro, captures carbon dioxide from gas processing at the In Salah oil field, storing it in a depleted gas reservoir nearby 1,800 m underground.
But where pipelines and carbon dioxide re-injection is proving successful on projects so far, a range of new initiatives will depend on carbon dioxide shipments by sea and its delivery to suitable offshore locations where it can be stored permanently in subterranean aquifers and porous rock reservoirs deep underground.
Where carbon dioxide requires transport over only small distances, ships are unlikely to offer a cost-competitive option as compared with pipelines, Dr Chapman says. And he believes that in the long run, most carbon dioxide will be transported by pipeline. However there will inevitably be »major opportunities« for shipping, both as an interim solution to enable early project investment prior to the installation of fixed transportation infrastructure and in cases where seabed pipelines are simply not practical.
Moreover, he says, where there is a large distance between source and store, shipping is expected to be highly cost-effective. »The shipping sector can expect to engage in a substantial expanding market in carbon dioxide transportation,« he declares.
Dr Simon Bennett is Programme Manager of the European Commission’s European CCS Demonstration Project Network. There are likely to be up to 12 large-scale so-called »demonstration« projects by 2015, prior to the commissioning of a larger number of CCS plants over the next several decades. Dr Bennett points to International Energy Agency estimates which suggest that as many as 320 CCS projects in Europe alone will need to be in place by 2050 in order to reduce carbon dioxide emissions by 50 %.
»This represents 37 mill. t of carbon dioxide captured each year by 2020, increasing to 990 mill. t by 2050,« Dr Bennett explains. By 2030, he believes that Europe could be transporting a volume of carbon dioxide annually that is greater than the volume of LNG forecast for import into Europe in 2020.
No surprise, then that the European Commission is taking the CCS issue very seriously and has recently increased the level of funding it makes available for large-scale demonstration projects. So far, it has invested around Euros 1 bn in six projects and expects to support a further eight between now and 2015. And Dr Bennett’s organisation is currently undertaking a study, due for completion later this year, of how CCS infrastructure can be developed in Europe, based on likely sources and storage sites.
One of the first projects involving carbon dioxide shipments by specialised gas carriers is being spearheaded by a consortium comprising Fortum Power, a Finnish power generator, its partner Teollisuuden Voima, Germany’s Siemens Energy as carbon dioxide capture partner, Maersk Tankers for shipment of the gas, and Maersk Oil on the development of suitable storage sites in the Danish sector of the North Sea. The project will involve the retrofitting of carbon capture plant at Fortum’s Meri-Pori power plant in Finland, with Maersk vessels shipping the gas offshore to underground storage sites in the Danish sector of the North Sea.
According to Joonas Rauramo, Business Development Manager at Fortum Power, the Meri-Pori project in Western Finland is one of the world’s largest integrated CCS demonstration projects. So far, he says, it is the only large-scale CCS demonstration project where ships are to be used. However, Finland has no goelogically suitable storage sites of its own and Rauramo explains that, as a result, its carbon dioxide must be shipped relatively long distances where pipelines could not compete with ships.
Where gas has to be shipped more than 300 km, ships are likely to provide a cheaper transport option, experts believe. But they point out that there are other advantages to transport by sea, including a shorter consultation, planning and approval process, more flexibility in linking a number of carbon dioxide sources with multiple storage sites, far shorter development periods and better returns on capital.
»The shipping industry also has much experience from transporting other gases and substances in similar conditions,« he points out, such as LPG and ammonia. »Ship transportation can play an important role in the CCS business,« Rauramo believes, »especially in the initial development phase of the industry and in conjunction with offshore operations.«
Anders Bradt Schulze, head of carbon dioxide shipping projects at Maersk Tankers, told conference delegates about Maersk’s involvement in the Finnish project. The company is helping to pioneer transport of the gas and says that ships are often cheaper than pipelines and provide far greater flexibility. Potentially, Schulze says, they can also be used for other gas products too, thereby offering potential to minimise ballast hauls. Analysts agree that this can only be a good strategic move, particularly in the early days of CCS.
At present, the carbon dioxide gas carrier designs are likely to be semi-pressurised and semi-refrigerated units which will ship the gas in liquid form at around -55 °C and seven bar in pressure. However, fully pressurised ships transporting gas at 20 °C and 70–80 bar could also be an option. The gas carrier designs, which Maersk is currently working on with the world’s largest shipbuilder Hyundai Heavy Industries in South Korea, will be based on the company’s long experience of LPG carriage. Carbon dioxide carriers that are designed to discharge offshore will operate on the same principles as shuttle tankers that are loaded offshore, Schulze told delegates.
One design that is on the drawing board involves semi-pressurised, semi-refrigerated vessels of 38,000 m3 capacity which would be capable of shipping some 45,000 t of carbon dioxide. The ships could be built either as dedicated carbon dioxide carriers, or as gas combination vessels capable of carrying LPG and ammonia, for example. Contracts for two new gas carriers for deployment on the Fortum project could be placed as soon as 2012, although these ships would probably be smaller 20,000 m3 units. Carbon shipments from the plant could begin in 2015.
In principle, gas carriers could offload their cargoes at around 2,200 tonnes an hour, but here offshore storage injection rates could become a constraint, according to Schulze. Some offshore subsea wells could only take accept a carbon dioxide volume of around 65 tonnes an hour. But this hurdle could be overcome with a Floating Storage and Injection Unit permanently located at the storage site, enabling the use of smaller gas carriers, and providing a buffer storage capability.
However, the consortium companies still face a range of political hurdles before they can realise their aims. Not least is the thorny issue of the London Protocol, an amendment to the IMO’s London Convention of 1972 which originally forbade the »trans-boundary« transport of waste material for disposal at sea. Although the amendment allowing carbon dioxide shipment to go ahead have been adopted – as has a similar amendment to the OSPAR Convention governing such traffic in Europe – the revisions have not yet been ratified by an appropriate number of signatories.
And, whilst appropriate amendments to the 1972 Convention are extremely pressing for countries in the vanguard of CCS technology, many other nations remain broadly indifferent. However, there is also some ambiguity because the 1972 Convention also states that there should be no good reason for preventing the offshore storage of carbon dioxide.
No-one seems sure, as yet, which wording will take precedence, and the lawyers’ bill for an opinion is likely to be a lumpy one. However, there are some pretty heavyweight parties, and presumably three European Governments, indirectly involved in the Meri-Pori project. The lawyers’ bills are unlikely to prove a sticking point, say analysts.
However. according to Per Arne Nilsson, a Senior Consultant at Panaware, as much as half of the 400 mill. t of carbon dioxide that could be stored each year by 2030 is likely to be stored offshore, and 30 % of that volume could involve transport by gas carriers.
He describes shipping as an »enabling industry« with a credible track record in gas transport, a safe business model, plenty of flexibility and low »locked-in« capital costs. Moreover, he says, the technology is well proven and very reliable – Teekay has completed 20,000 loadings in the North Sea, without incident, he points out.
