The case for re-using infrastructure for CO2 transport and storage

As major oil and gas fields mature and new discoveries become limited, many companies decide to decommission their offshore assets, such as platforms, wells, and pipelines. The North Sea has, in recent years, seen an increase in decommissioning activities, costing around £800 million (€900m) in 2014 and £1.1 billion (€1.4bn) in 2015. These activities are estimated to cost around £47bn (€53bn) overall by 2050, with an uncertainty of +/- 40% (Oil & Gas Authority, 2016). Given the current structure of the UK tax regime, much of these costs are ultimately born by the taxpayer.

At the same time, the need for deep decarbonisation of industry and the development of carbon capture and storage (CCS) in Europe has become ever more evident, as has the need for access to CO2 transport and storage infrastructure (Gross, 2015), (CCC, 2018). Developing this infrastructure, however, is capital intensive.

In some circumstances, it has been demonstrated that delaying decommissioning of some of the key pieces of oil and gas infrastructure – in particular pipelines – and re-purposing it for CO2 transport and storage, is a least-cost opportunity to provide additional value to these assets and deliver significant cost savings to a CO2 transport and storage project.

Failure to preserve this infrastructure and instead leave it to be decommissioned could therefore result in a waste of both public and private funds as well as further delay the deployment of CCS in Europe.

Learning from ACT Acorn

This topic has been a key research area of the ACT Acorn project. One of our main findings was that, while oil and gas platforms and wells are technically feasible for re-use in a CO2 transport and storage project, pipelines offer the best opportunity and the most re-use value. Some research highlights are shown below:  

Pipelines offer the best re-use opportunity

  • Re-using an existing oil and gas pipeline deemed suitable for CO2 transportation in a CCS project, for example, is likely to cost between just 1%-10% of the cost of building and installing a new pipeline.
  • Obviously, the cost and re-use profile must be assessed on a case-by-case basis; this holds true for all assets, including platforms and wells.

Current North Sea opportunities

  • Currently, three of the most suited pipelines for reuse in the North Sea include the Atlantic pipeline, the Goldeneye pipeline, and the Miller Gas System (MGS) pipeline.
  • All three pipelines have been preserved in-situ under the Interim Pipeline Regime (IPR) until 2020 and 2021.
  • Each of these pipelines offer significant build-out opportunities for expansion of a CO2 transport and storage infrastructure in the UK, which can extend to the Norwegian Continental Shelf.

Deferring decommissioning

  • If decommissioning is deferred and a decision made to preserve a pipeline, the operational costs of monitoring and maintenance are low; approximately £100,000 (€113.5k) per year, depending on the length and condition of each pipeline.

Repurposing a pipeline

  • Repurposing an existing pipeline is not usually a complex process. It would involve various commissioning duties, such as drying the pipeline or running an intelligent pig, costing around £2m-3m (€2.3m-€3.4m).

Assessing suitability of pipelines

  • The age, condition and pressure rating of the pipeline are key factors in assessing its suitability.
  • Older pipelines, or those that have experienced harsh production environments, may have issues with corrosion or other integrity concerns.
  • The potential for re-use of any pipeline depends both on technical and practical factors; for example, proximity to a storage reservoir, remaining lifetime, permitting requirements and liability arrangements.

Valuable infrastructure at risk

  • Given the time bound/decommissioning nature of existing infrastructure, there is a risk that without appropriate policy and financial support much of this useful infrastructure will be decommissioned, precluding the lowest cost CO2 transport and storage developments.
  • Not re-using existing assets, particularly pipelines, would increase the initial hurdle for CCS development and deployment in Europe by raising the capital cost of replacement.
  • Realising the re-use value can only be achieved through a successful collaboration between the government and the industry/operators, with appropriate compensation given to asset owners for costs incurred due to prolongation of asset life (i.e. for any changes in costs, liabilities, tax allowance, etc.).

The ACT Acorn infrastructure re-use database and factsheets

An important part of the work undertaken in the ACT Acorn project was establishing a database of offshore pipeline infrastructure in the North Sea using data from the UK, Norway and Dutch authorities. We hope that this will form a useful tool for future analysis and identification of key pipelines to preserve for potential CO2 transport and storage project. The database will be publicly available on the ACT Acorn website in the coming weeks and we hope to encourage other researchers and institutions to develop and share this resource. Recognising that infrastructure re-use is a complex and often misunderstood area that could make a significant impact to the capital costs of a CCS system, we have also produced a set of factsheets summarising the infrastructure re-use potential of different oil and gas assets. These will also be publicly available on the ACT Acorn website in the coming weeks.

Sources:
CCC. (2018). An independent assessment of the UK’s Clean Growth Strategy: From ambition to action. https://www.theccc.org.uk/publication/independent-assessment-uks-clean-g...
Gross, R. (2015). Approaches to cost reduction in carbon capture and storage: Advisory Group Report. London. https://www.theccc.org.uk/wp-content/uploads/2015/06/Gross-2015-Approach...
Oil & Gas Authority. (2016). Decommissioning Strategy. https://www.ogauthority.co.uk/media/1020/oga_decomm_strategy.pdf

(Photo: Eva Sleire/Equinor)