Carbon dioxide goes underground

Masdar is developing a national carbon capture network, the first of its kind in the world.

While some firms in Europe are already experimenting with carbon capture and storage, Abu Dhabi's project will be the world's biggest, and just a founding link in a much broader network.

Abu Dhabi is doing something that other jurisdictions have only talked about - building a network to capture industrial carbon dioxide emissions and bury them underground. Despite an uncertain economic outlook, government-owned Masdar is pressing ahead with its ambitious carbon capture and storage (CCS) scheme, which is a cornerstone of the emirate's plan to cut its carbon emissions by one third by 2020.

The company has already taken concrete steps in laying the groundwork for phase one of the development, which would link several large power and industrial projects at the Gulf port of Taweelah by pipeline to the giant Habshan oilfield in south-western Abu Dhabi, with a branch line carrying carbon dioxide to the oilfield from a proposed Shuweihat power project. Abu Dhabi National Oil Company (ADNOC) plans to use the carbon dioxide in place of natural gas to push more oil from the ageing Habshan field, and would ultimately store the waste gas underground in the depleted oil reservoir.

Last November, Masdar awarded the front-end engineering and design contract for the project to Mustang Engineering, a Houston company with previous experience in carbon dioxide recovery and injection projects. A contract for detailed engineering, procurement and construction should be awarded early next year, and start-up is planned for 2013, said Sam Nader, the director of Masdar's carbon management unit. "Our aim is to build a national network, but we have to start somewhere."

As just the founding link in a much broader network, the initial three-point Abu Dhabi CCS project would still be the largest of its kind in the world, Mr Nader said. About five million tonnes of carbon dioxide would be captured annually from a gas-fired power plant, an aluminium smelter and a steel mill to be built at Taweelah. A further 1.5 million tonnes per year would be piped from a proposed hydrogen plant at Shuweihat.

That facility would be part of a US$2.5 billion (Dh9.18bn) joint venture between Masdar and Hydrogen Energy, itself a partnership between the British oil company, BP, and the Anglo-Australian mining group, Rio Tinto. The hydrogen plant, using natural gas as feedstock, would fuel Abu Dhabi's first clean-burning thermal power plant. A final decision on the project is expected later this year. Since all parts of Masdar's planned carbon network are envisaged as commercial projects, they are expected to be profitable, but margins could be slim unless the UN changes the rules for its Clean Development Mechanism (CDM), a programme that awards marketable carbon credits on the basis of certified reductions in emissions. Although the global carbon market grew by 83 per cent last year - according to the consulting firm, Point Carbon - Masdar is not investing in CCS solely to take advantage of the CDM. There are other advantages to weigh including direct environmental benefits, more efficient use of Abu Dhabi's oil and gas resources, and the chance to become a leader in CCS technology.

Still, the CDM is important. "It would definitely add value. It would improve the economics of this technology," said Mr Nader. Unfortunately for Masdar, UN negotiators last November postponed a decision on including carbon capture in the CDM until 2012 because of a controversy that has pitted environmentalists against each other. "We're absolutely opposed to it because it's not a proven technology, it's hideously expensive and it will be using developing countries as a test bed," said Stephanie Tunmore, a campaigner for Greenpeace International.

Johathon Porritt, the former director of Friends of the Earth, said many environmentalists held such views and remained "very nervous" about CCS. "But I just don't see how we can achieve the necessary reduction in concentrations of CO2 in the atmosphere without a massive international commitment to CCS," he said. Masdar does not dispute that CCS is expensive. According to Bader al Lamki, the carbon project's manager, equipping an industrial or power project for carbon capture means adding a small chemicals plant. But costs would come down with improved technology and economies of scale, he predicted.

By going big with its CCS scheme, Masdar hopes to demonstrate this to the world. "Masdar's main message is that we want to be able to contribute globally," said Mr Nader. "The intent is to assume leadership at a global level." Mr al Lamki said the company was already developing cutting-edge expertise in designing pipelines to transport carbon dioxide, a gas that poses special problems because it is corrosive.

Masdar is also developing new processes for capturing carbon dioxide under conditions that engineers find challenging, such as with low concentrations and pressures. In such a project at Ruwais, it is working on extracting carbon dioxide from the flue gases of a fertiliser plant operated by ADNOC's FERTIL unit. "If we can do it there, we can do it anywhere," said Mr al Lamki. @Email:[e-mail]