CCUS: a strong option for decarbonising LNG
A recent report by the Global Gas Innovation Roundtable concludes that there is a strong case for carbon capture utilisation and storage (CCUS) as a decarbonisation option for some parts of the LNG supply chain, but government support for the technology is necessary for almost all projects.By Joseph Murphy
Carbon capture storage and utilisation (CCUS) technology has been demonstrated to be “safe, effective and scalable” and LNG operators should “strongly consider” it as part of a range of decarbonisation options, a report prepared by the Canada West Foundation for the Global Gas Innovation Roundtable in June found. However, the report stressed that “substantial challenges exist – both technical and financial,” and that other means of decarbonisation, such as electrification or fuel switching, may be more suitable depending on factors such as geography, government policy and local industrial context.
Emissions and CCUS potential along the LNG supply chain
Source: CCUS as a Tool for LNG Innovation, prepared for the Global Gas Innovation Roundtable
The most suitable application for CCUS in the LNG supply chain is natural gas processing, the report noted, as CO2 must be removed at this stage anyway before the gas can be liquefied, and so represents little or no added cost.
“It is only sequestering CO2 (as opposed to venting it) that would create additional cost,” GGIR said. “For this reason, CCUS is already used or is being constructed for many natural gas processing facilities globally.”
Another good candidate for CCUS is liquefaction, as the emissions are high and concentrated in one location. The report cited research by Wood Mackenzie that estimated that CCUS can cut the emissions from liquefaction by up to 90%. Several CCUS projects handling CO2 from liquefaction plants already exist, including at Ras Laffan in Qatar, Snovhit in Norway and Gorgon in Australia.
“Carbon capture at the liquefaction stage can be applied to emissions in the flue gas from gas turbines used to power the liquefaction process; or from emissions released in the generation of power for the remainder of the facility,” the report explained. “Emissions can be reduced through either pre- or post-combustion technologies.”
On the other hand, while applying CCUS to LNG shipping is technically feasible, it is still at a very nascent stage of development, the report said. An instance of early research is a feasibility study and a pilot project that has been advanced by the Oil & Gas Climate Initiative (OGCI) on a Stena bulk medium range tanker.
“The OGCI’s early conclusions are that capital and operating costs are a substantial hurdle, and other carbon reduction technologies (such as fuel switching, or using sails to reduce fuel needs) are likely to be more attractive in many circumstances,” the report said.
Moving further down the spectrum of suitability there is transportation, usually via pipeline, and receiving, storage and regasification infrastructure. Emissions from transportation usually come from small facilities such as compressor stations and are spread out, whereas emissions from receiving, storage and regasification are relatively low.
At the bottom end is upstream activities, where emissions come from dispersed well sites, making CCUS impractical.
Critically, the report also stresses that three quarters of emissions along the LNG lifecycle come from the end-use combustion of the gas, making this “an excellent fit” for CCUS, depending on geological conditions. But these emissions are typically outside the control of the LNG producer.
What can governments do?
Though the value of CCUS as a decarbonisation option has been demonstrated, the report cautions that projects are still complex and expensive to build. For example, the Northern Lights/Longship project in Norway, with a storage capacity of at least 5mn tonnes/year of CO2, carries a construction price tag of $1.6bn.
On the upside, those costs are falling as a result of learning obtained from frontrunner projects such as Quest CCS in Alberta, Canada, whose operators estimate that were it to be developed again, costs would be around 30% lower. Recent studies show the technology will be significantly cheaper and more efficient, and costs can also be cut through the use of shared infrastructure models that deliver economies of scale, the report said.
Another piece of good news is that governments recognise the high cost of initial technology deployment, and that a number are now providing direct or indirect support, though their approaches differ. US support, for example, hinges greatly on a tax credit, while the EU support comes more in the form of grants and loans. Governments can also provide indirect support through the use of carbon offset markets and support for blue hydrogen production, which requires CCUS as part of the process. Restricting or pricing emissions is another option, as CCUS costs can be balanced against the cost emitters pay in tax or penalties.
The report adds that sequestering CO2 underground can pose complex legal questions over property rights and who owns or may access the spaces between particles of rock under the surface where the CO2 can be stored. As such, governments can support the technology by developing legal frameworks.
“The take-away message is that governments can use a range of direct and indirect policy approaches to help CCUS adoption,” the report said. “Given that CCUS is expensive, this support will likely be needed in almost all cases to make CCUS viable for LNG projects.”
Supported by the Canadian Gas Association (CGA) and created this year, the Global Gas Innovation Roundtable states its mission is “to ensure that governments, policymakers, multilateral institutions and energy thought leaders have a greater understanding of the technology and innovation underway that will improve the performance – environmental and otherwise – of the gas sector.”
“It will raise the profile of gas technology and innovation through a variety of live and digital touchpoints, including the sharing of leading practices, highlighting emerging technology research and innovation, and profiling the array of events underway at any time around the world,” it says.