Adnoc and Masdar begin first carbon-burial project

Adnoc and Masdar plan to break down on the region's first carbon burial project next year, moving ahead with delayed plans that are critical for economic growth and the environment.

Adnoc and Masdar plan to break ground on one of the Arabian Gulf’s first commericial carbon burial projects next year.

A master plan for a national greenhouse gas emissions network connecting industrial sites to oilfields has been in development for more than five years during protracted negotiations over a price for the government-owned clean energy company to sell the carbon dioxide to Adnoc.

The companies announced the progress on an initial carbon dioxide project yesterday, a major step forward for a technology that is still considered experimental.

Today only a dozen sites in the world bury carbon emissions underground, with nine, including Abu Dhabi’s, are under development. Other projects have been held up by concerns about the risk of storing carbon dioxide underground or by a carbon price too low to support a commercial project.

“We are ambitious and we are going to adopt a very aggressive timeline,” said Sultan Al Jaber, the chief executive of Masdar, the clean energy company owned by the government. “One of our ultimate goals is to help develop the technology and bring the cost down in order to make such projects more commercially viable in the future.”

The joint venture between Masdar and Adnoc, first announced last year, plans to bury 800,000 tonnes of emissions a year, equivalent to the emissions of 170,000 cars. It awarded a procurement and construction contract to Dodsal Group in July and aim to break ground in the middle of next year on facilities at the Emirates Steel plant in Mussafah. From there the emissions will be piped 50 kilometres to the Rumaitha field, one of the smaller fields in Abu Dhabi’s main onshore concession. The carbon will help to coax output from particularly hard-to-reach part of the field which will ultimately increase the emirate’s reserves, and the larger Bab field is the next candidate for carbon burial, said Abdulla Nasser Al Suwaidi, the director general of Adnoc.

Mr. Al Jaber and Mr. Al Suwaidi declined to say what carbon price had been established for the Emirates Steel project, but said they had not negotiated a nationwide carbon price that could allow for rapid deployment of a national pipeline network connecting factories to oilfields, which was originally planned to start operation this year. The absence of agreement on a carbon price led BP to exit a planned US$2bn hydrogen-fuelled power plant three years ago.

“This project is very important because it is the very beginning and it can foster future development,” Mr. Al Suwaidi said on sidelines of Adipec, the oil conference in Abu Dhabi that began yesterday. “In the end we need billions of cubic feet of CO2, and the economics will still be specific in each case; it will be different because the size of CO2 emissions will be different and the properties of the reservoirs will be different.”

As many as 100 carbon capture projects are needed by 2020 and 3,000 by 2050 to slow the speed of global warming, according to the International Energy Agency, the Paris-based watchdog.

Abu Dhabi is not alone in trying to free up natural gas for power generation. Demand across the GCC is projected to rise to 400 billion cubic meters in 2030 from 256 billion cubic meters today, according to a report issued by IHS yesterday.