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Carbon capture projects gaining traction: Fuel for Thought

Summary:
US upstream company Occidental Petroleum is committed to carbon capture and injection as a method of boosting oil recovery both in its Permian shale operations and outside the US, CEO Vicki Hollub said last week. She was one of a number of industry leaders who outlined carbon capture projects around the world, many geared to utilizing CO2 from heavy industry in Europe and the US, at the Accelerating CCUS conference in Edinburgh. In the US, carbon capture got a boost this year from new tax credit legislation known as 45Q. Hollub said Oxy, as the largest “handler” of CO2 for enhanced oil recovery, was achieving recovery rates of as much as 70% at one of its conventional Permian reservoirs due to carbon injection, and aimed to extend CO2 injection to its Permian shale operations, following

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US upstream company Occidental Petroleum is committed to carbon capture and injection as a method of boosting oil recovery both in its Permian shale operations and outside the US, CEO Vicki Hollub said last week.

She was one of a number of industry leaders who outlined carbon capture projects around the world, many geared to utilizing CO2 from heavy industry in Europe and the US, at the Accelerating CCUS conference in Edinburgh.

In the US, carbon capture got a boost this year from new tax credit legislation known as 45Q.

Hollub said Oxy, as the largest “handler” of CO2 for enhanced oil recovery, was achieving recovery rates of as much as 70% at one of its conventional Permian reservoirs due to carbon injection, and aimed to extend CO2 injection to its Permian shale operations, following encouraging results from four pilot wells.

With Permian producers typically only recovering 6%-12% of “in-place” hydrocarbons, carbon injection is likely to become widespread in the shale industry, and there are growing prospects for bringing piped carbon dioxide from industries in the central US to the Permian, Hollub said.

“What we want to do is use enhanced recovery also in the shale play. We do know we can get incremental hydrocarbons out of the shale play with CO2 injection,” Hollub said. “We think CO2 is an opportunity. We have a strategy to capture CO2 from multiple industrial sites in the middle part of the US and to get that to the Permian by pipeline.”

Oxy is also looking at deploying CO2 reinjection at three production blocks it recently obtained in Oman, sourcing the CO2 from the electric power generation process needed for operations there, partly due to a recent investment in power company NET Power. It will also look at extracting CO2 directly from the air at the same project, she said.

She outlined similar possibilities in Colombia, at Oxy’s La Cira-Infantas joint venture, and at the Al Hosn ultra-sour gas processing plant in Abu Dhabi, where the CO2 could be re-injected into nearby reservoirs.

“We’re looking at a lot of things. Everywhere we look at there’s the potential to do this,” Hollub said.

European carbon capture drive

At the same event, the Norwegian energy ministry’s director general for climate, industry and technology, Bjorn Haugstad, said Norway’s carbon reinjection continued to expand, having started 23 years ago with injection at the Sleipner field, then the Snohvit gas field in the Barents Sea, and most recently Gudrun.

Partly because of the tax incentives involved, Sleipner had been closely monitored and no CO2 leakage detected, he said.

By late 2020, Norway aims to approve plans to bring CO2 by ship from one or two industrial facilities, cement manufacturer Norcem and waste processor Fortum, for reinjection into depleted North Sea fields, in which Shell and state-controlled Equinor are expected to play a role. The cement industry globally accounts for 2-3% of all CO2 emissions, according to Norcem.

The plans could include injecting CO2 shipped from other countries including Sweden, which has emissions associated with steel production, as well as Swedish refiner Preem, Haugstad said.

“Three Norwegian fields are doing CO2 injection on an absolutely routine basis and the experience so far is it’s completely safe,” he told S&P Global Platts.

Earlier, Claire Perry, UK energy and clean growth minister, reiterated UK efforts to develop carbon capture, utilization and storage projects based around industrial clusters, rather than solely on individual power stations.

She noted that a longtime planning scenario produced by Shell in which global temperature increases are kept to less than 2 degrees Celsius entails construction of 10,000 large-scale carbon capture and storage projects by 2070.

Currently, the world has around 20 large-scale CCUS facilities.

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