Acorn Options - Video Transcription

Alan James: [00:00:23] My job today is to talk a little bit about the development options for the Acorn project. This encompasses a number of pieces of work that were done as part of the ACT package and we'll come on to some of those things. What I'd like to reinforce here is how transformational this ACT programme has been for this project. It's helped us move it to a position where it has the possibility now of moving on and becoming a piece of real infrastructure. Without the ACT programme that simply wouldn't have been a possibility. So I think it's a great example of how these are indeed programmes which are so much hard work for so many people, and can hopefully provide some very good, positive outcomes at an early stage that we all need for climate mitigation. The contributors to this package, some of them are listed here. 

 

Alan James: [00:01:29] Many of the folk here are in the room. Peter from SCCS will be on the panel a little bit later. But actually the programme as a whole includes a very wide number of people, even beyond this list, from all the different partners. So, as we're all aware we have been up and down the garden path a few times in the area of CCS and we have been very close on a number of occasions. I think the one thing that we have learned is it's often about the cost associated with doing this. So for Acorn we basically started with a blank sheet of paper and those challenges, to look at what was the lowest cost CCS programme we could envisage and really get started with and move forward. So it was born out of that kind of determination. So what we needed to do is find a coastal emissions point: we weren't necessarily interested in it being a huge emissions point, just a coastal emissions point of some significance. We needed access to offshore storage sites that were well understood and could be matured quickly without long exploration programmes. And then the key thing is we needed to look and find where there was existing pipeline infrastructure that wasn't so old because it's been in oil and gas used for 35 years, but it has been in place, the infrastructure is in place, and it has some reuse life left in it that could be started very early. So we went looking all the way round the UK for this combination of elements and we found a couple of places. The area that we managed to get most support in was up in the north east of Scotland and that's what became the Acorn project concept. So we've got the emissions point, the starting point, is at the St Fergus gas terminal and here we planned perhaps to catch around about 200,000 tonnes a year which is small, modest - not the kind of emissions that you would build a CCS plant for, but the purpose of those emissions is simply to commission the infrastructure and get it running and being open for business. 

 

Alan James: [00:03:57] The second item is reuse - potentially reusable pipelines - and there are three lines here: the Atlantic pipeline, the Goldeneye pipeline and the Miller gas system which you can see on the map there. Some of these pipelines have only four years of operational use transporting gas. They have operational design lives of 20 years plus, but four years of use, so this is - when you're buying a second hand car, this is the sort of attribute you're looking for. It's something that has one careful owner and has relatively low levels of use that you can be confident in moving forward and enjoying for a significant period of time. And these storage sites, up in the northeast of Scotland, in the UK in general, some seventy eight gigatonnes of potential storage resource. That is enough to hold about 200 years' worth of UK emissions as they were measured in 2016. Up in Scotland around 30 percent of that resource is within 50 kilometres of these three pipelines. So in that space there is lots of options and the programme has helped us mature two of those which we'll hear about later on: the Acorn storage site, which is this area here and the East May storage site. Our learnings over the years is it's no use having one option because something will get in the way and stop you from doing that. So it's good to have more than one option, which is either build out or fall back or perhaps both. 

 

Alan James: [00:05:45] So 200,000 tonnes. It's a starting point and that basically provides a mechanism whereby we can establish some infrastructure: a full chain infrastructure which perhaps would do two million tonnes a year to start with. So it would be ready and open for business: an analogy would be like, it's like building a six lane highway and putting one Ford Fiesta on it - it's ready to roll to receive other business and help support the progressive decarbonisation of industrial centres such as Grangemouth, Teesside, Humberside and elsewhere. Even around the North Sea basin. So another reason that St Fergus is whilst it might appear quite a long way away and that there is a big gas plant up at St Fergus but it's quite a rural space beyond that. We have to remember that where carbon comes into the UK, with it continually reducing coal, a huge amount of the carbon now that enters the UK is in the form of gas. Thirty five percent of that gas arrives at St Fergus. So if we are to look forward in the future to a hydrogen economy where we take natural gas and convert some or all of it to hydrogen and send hydrogen to the market, St Fergus is a great place to do that, as are the other big gas import locations such as Teesside. But in that world the natural gas could arrive at St. Fergus, spend a few hours on the beach; the hydrogen goes to market to be used, and the carbon, in the form of carbon dioxide, then goes offshore into the storage sites. So the carbon just spends a matter of hours on the beach before we put it back underground. 

 

Alan James: [00:07:34] We're looking at ship transport here and the programme has done some work around the practicalities and feasibility of shipping into Peterhead deepwater port and has established that it's feasible to have a fleet of perhaps three or four ships that could service that requirement, unload at Peterhead and then that would flow around by pipeline to St Fergus before going offshore. And at an upper limit that might be able to support perhaps an industry of maybe 16 million tonnes a year flowing through that at its upper level. Practically it's likely to certainly start much lower than that, but that's the kind of upper level that might be serviceable. 

 

Alan James: [00:08:20] And the other key element here of infrastructure that's already in place is this line onshore: this is the Feeder 10 pipeline. Now this is one of four major gas pipelines that were put in place to take the gas from the North Sea down towards the market in the central belt and then beyond to the rest of the UK. As the North Sea gas supply starts to slowly diminish. We've got four pipelines. Actually we could service everything that we require with three. And this pipeline has already been studied in lots of detail as part of the Longannet CCS project a few years ago, when it was to be used to transport CO2 from the Longannet power plant up towards St Fergus and out into the North Sea. And that infrastructure is still there and could service the emissions requirements of Grangemouth and the area down here. And again for Scotland, about 90 per cent of Scotland's emissions lie within 50 kilometres of this line. 

 

Alan James: [00:09:35] So on that basis we have all the components of a piece of infrastructure here: offshore we'd be using subsea well technology so we would not be using any platforms, or reusing platforms. We would need a new well offshore to start with and that would basically enable a system to be established that would then be able to receive other emissions from other projects. Now if you're a developer of an industrial plant and you're looking for a decarbonised solution for that plant, having a transport and storage infrastructure system that is there and operating makes the investment decision for that plant much easier, because you can concentrate on the plant itself rather than all of that offshore infrastructure to put in place. And, broadly, even to replace the smallest one of these pipelines is hundreds of millions of pounds. 

 

Alan James: [00:10:36] So, as you can see there's lots of options here by which the project can progress. And one of the scenarios that we've been looking at perhaps looks a little bit like this. So if we're able to continue to make good progress there is the potential for the project to reach an investment decision perhaps at the back end of 2020. In that scenario we'd be looking to be operational from about 2023. The injection well would be constructed in 2022 in readiness for that, and then the inventory would start to flow in 2023. This is what we're calling phase 1, so this is enough to put the infrastructure in place and get it operating. It's not a massive amount of CO2 abatement but the system's there ready to receive. After that, one scenario we're looking at very closely now is that hydrogen production, perhaps starting at St Fergus, commences: that would deliver another perhaps half a million tonnes a year of CO2 that could be introduced into the same infrastructure without having to augment or build it out any further. 

 

Alan James: [00:11:52] With that visibility it could be that we start to look at getting ship imports from some of our industrial colleagues around the North Sea basin from around about 2025 perhaps. And perhaps when Feeder 10 comes in one modest power plant with CCS attached to it or industrial plant - you could see a few scenarios by which we could introduce another 3 million tonnes. So our requirement for a second well would only come when these numbers add up to more than about 2 million tonnes. So at this point we'd have to put maybe one or two more wells in. And as the industrial plants get connected it's feasible, and in fact likely, if this timetable is kept to, that before the end of the decade the initial storage site resource would effectively be sold out, because it would be booked then for the next 20-30 years for the life of that plant in order to store. So around about this time we'd start also looking at the second storage site for build out and developing that further. 

 

Alan James: [00:13:05] And on the important nitty gritty aspects of cost: at the moment for that phase one project our base cost estimate is sitting around about £276 million. This basically comprises the small capture plant, it comprises the compression and conditioning on the beach, one well offshore and a control system for that well. That system, whilst it would only actually deliver 200,000 tonnes a year, the infrastructure - the transport and infrastructure - would be good for 2 million tonnes a year. And it would also provide a platform by which the UK would really have the option to deploy CCS at scale in the timeframe it was looking for in 2030, because it's no use starting it in 2029. To deploy at scale you need to have an operating plant mid twenties in order to get that to be realizable. 

 

Alan James: [00:14:03] Thank you very much.