Al-Shaheen Gas Flaring Reduction & Gathering Project

1
Al-Shaheen Gas Flaring Reduction Gathering
Project

• Summary
• Conclusions
• Recommendations

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Presentation Contents

• Qatar, and Global Emissions
• El-Shaheen Gas Flare Reduction and Gathering
  (GFRG) Project
• Lesson Learned for other GFRG projects
• Conclusions

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Qatar CO2 Emissions

• In 2002, Qatar emitted 28 million tons of CO2
• Only 0.13 Global emissions...
• ...but about 37 t per capita compared with...
• 27 t per capita in USA
• ...or roughly 10 t in UK and Denmark
• ...or roughly 2.5 t in China

Qatar Takes this Seriously!
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Qatars Actions

• Qatar acceeded to the Kyoto Protocol on 11
  January, 2005
• HSE Regulation Authority designated as National
  Authority...
• ...to deal with Kyoto compliance...
• ...sustainable developments making use of...
• ...the clean development mechanisms

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Even Prior to Kyoto Accession

• Qatar made a major investment at Al-shaheen
• The 300 million project was started in 2002
  and completed during 2004
• between 2004 and 2020....
• ...32 million tonnes of high quality hydrocarbons
  will be exported to processing plants in Qatars
  industrial complex
• Equivalent to 230 million barrels of oil
• ...84 million tonnes of CO2 emissions will be
  avoided at El-Shaheen oil production operations

Project will cap El-Shaheens CO2 emissions and
will avoid almost 4 years of National emissions
at 2002 levels
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Million t/y 6 5 4 3 2 1
Gas exports 32 million t
12 million t Gas Flared
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Significant CO2 Emission Avoidance
Of which 32 million t was before 2005
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Economic Benefits
1.23 Mt gas saved during 2005 was worth 369
million At 42/b oil equivalent
Lifetime revenue addition will be over 10 billion
at 42/boe
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Low Cost of CO2 Avoidance by Gas Flare reduction
at Shaheen
CO2 avoidance costs in Annex I countries are high
EU ETS at 23/t Al-Shaheen GFR cost 350M/84M
4.17/t CO2
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Additional Economic BenefitsQatar can trade this
advantage

• Most industialized nations cannot meet their
  Kyoto obligations from reductions within their
  borders
• Such reductions are costly for highly
  industrialized nations
• The Kyoto process makes it attractive for Annex I
  countries to purchase less costly Certified
  Emission Reductions from Annex II countries, like
  Qatar

Qatar can benefit from these trades
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Al-Shaheen Experience Shows that Gas Flaring...

• ...in a hydrocarbon constrained Globe
• ...wastes valuable resources and money!
• Gas Flare reduction gathering...
• increases hydrocarbon reserves
• pays off the investment rapidly
• reduces CO2 emissions at low cost

Further GFR projects are also likely to benefit
Qatar the Environment
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CO2 is a vital resource for Qatars Hydrocarbon
Future

• When hydrocarbons are transformed or burned, CO2
  is formed
• CO2 released into the environment increases
  already high atmospheric concentration
• CO2 captured from industrial processes in Qatar
  can be returned to the oil or gas reservoir ....
• ...to enhance the recovery and increase the
  reserves of Qatars valuable hydrocarbons

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Which EOR Gas ?
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produces 3 barrels Incremental oil
1 ton captured CO2 at 10 - 30
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CO2 is already in wide-spread use
Industrial sources have always been important
73 CO2-miscible floods, 2004 USA Canada (OGJ)
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Global EOR Potential Enormous(2004 Estimate
Dave Beecy, US DOE)
Mostly in the Gulf
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Potential for Qatar

• Qatars proven oil reserves are 15 billion
  barrels (OPEC Annual Report, 2004)
• Probable Original Oil in Place, 37 billion
  barrels (speculative)
• Experience in carbonate reservoirs of the West
  Texas Permian indicates that recoverable oil
  reserves can be boosted by between 5 and 20...
• or in Qatar by between 1.8 and 7.5 billion CO2
  -incremental barrels
• thereby extending Qatars oil production life by
  between 5 and 20 years (at todays rate of 1
  million bbls/day)

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How much CO2 is needed?

• At an industry average of 3 barrels of
  incremental oil from 1 ton of CO2 injected
  permanently sequestered...
• ...Qatar will therefore need to supply its oil
  fields with between 600 and 2000 million tons of
  CO2 over the lifetime of EOR
• thus taking a Globally significant quantity of
  CO2 from the atmosphere

Global Emissions of CO2 during 2003 were 24,000
million tons
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Where will the CO2 Come from?

• Sour gas production treatment
• Gas to Liquid industries
• LNG plants
• Ammonia and hydrogen production
• Other petrochemicals
• Oil refining
• Cement and other manufacturing plants
• Power generation water desalination
• Other industries and possibly imports

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Next Steps

• Strengthen the National Regulation Authority in
  Qatar to..
• ..develop a CO2 reduction strategy taking into
  account
• Qatars economic interests
• Economic and environmental interests of Qatars
  many Global trading partners
• Growing need for energy efficiency
• Longer term diversification of energy resources
• Development of a National CO2 inventory for
  Qatar...
• ...listed according to cost and feasibility of
  capture
• Development of an inventory of CO2 sinks
• Listed acording to suitability for EOR or EGR
  (enhanced gas recovery)

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Thank you!