The Middle East's Potential As A Carbon Capture And Storage (CCS) Hub For The Hydrogen Economy

Compared to the end of 2015, when just 15 large-scale CCS projects were active, this is an increase of 12 MMtpa. In all, all facilities in various stages of the development cycle contribute to a project pipeline capture capacity of about 150 MMtpa. This seems optimistic, yet this potential was predicted back in 2011 when capacity was expected to fall every year until 2017.

To keep the average global temperature rise below 2 degrees Celsius, the IEA's modelling indicates that roughly 4 Gtpa of carbon dioxide (CO2) must be caught by 2040, and then another 6 Gtpa must be captured by 2100. Commercial CCS facilities currently in development cannot meet this goal. To achieve ecological goals, facility capture capacity will need to rise 100-fold. Approximately 2,500 CCS facilities will need to be operational worldwide by 2040, assuming each site has a CO2 collection capacity of 1.5 MMtpa.

Three large-scale commercial CCS facilities—the Uthmaniyah CO2-enhanced oil recovery (EOR) Demonstration Project in Saudi Arabia, the Al Reyadah CO2-EOR Project in Abu Dhabi, and the Ras Laffan CCS Project in Qatar—account for roughly 10% of the worldwide CO2 capture capacity at present.

The Uthmaniyah CO2-EOR Demonstration Project set out to determine whether or not it was feasible to sequester CO­2 in a mature zone of an oil reservoir. Capturing, compressing, and drying 0.8 MMtpa of CO2 from the Hawiyah Natural Gas Liquids (NGL) Recovery Plant began in July 2015, and the project is now fully operational. Approximately 85 kilometres of pipe transport the captured gas to the Uthmaniyah sector of the Ghawar field (the largest oil field in the world), where it is injected into an oil reservoir at a rate of 40 million standard cubic feet per day (MMscf/d), thereby securing the gas, keeping the pressure in the reservoir constant, and improving oil recovery.

The Al Reyadah Project, also known as Abu Dhabi CCS, is the first commercial-scale carbon capture and storage (CCS) facility in the world, and it is located onshore in Mussafah. After two years of successful CO2-EOR pilots in 2009 and 2012, Phase 1 became live in 2016. To achieve enhanced oil recovery (EOR) at the onshore Rumaitha and Bab oil fields, this project captures, compresses, and dehydrates up to 90% of CO2 from an Emirates Steel production facility at Musaffah, then transports and injects the CO2 through a buried pipeline stretching 43 kilometres in length.

 Despite widespread assumptions that the Ras Laffan CCS Project—also known as the Qatar LNG CCS or the RasGas CO2 Injection Project—went live in 2005, precise data about the endeavour remain classified. Specifically, the Ras Laffan Liquefied Natural Gas (LNG) facility's CO2 will be captured as part of this initiative. QatarEnergy decided not to use the captured CO2 for EOR purposes like Saudi Aramco and Abu Dhabi National Oil Company (ADNOC), instead injecting it into a designated geological storage site, thought to be the Arab Formation. Earlier projections put the rate of CO­2 injection into the ground at 1.1 MMtpa, while more recent calculations suggest that the rate should be closer to 2.1 MMtpa.

Challenges ahead

"The requirement to cut emissions in sectors that are difficult to decarbonize and the general high cost mean that we do not expect Middle Eastern countries to fulfil net-zero promises on schedule," said Dan Klein, head of future energy pathways at Platts Analytics. Decarbonizing their industrial and refining sectors, where electricity cannot be used in all situations, is the biggest hurdle for Middle Eastern countries to attain net-zero. Because of the region's reliance on industry and refining—both of which are challenging to decarbonize—and fuel subsidy policies that encourage consumption, Klein argues that the region will have a tough time fulfilling expectations. In addition, gas emissions are projected to rise by 2% in the industry in 2022, more than offsetting the 0.3 % drop in oil emissions in the industry; gas emissions growth in the industry is just above the global growth of 1.94 %, but the global economy is more diverse and has the potential to embrace new technologies such as electric vehicles, Klein added.

As the founder and chief executive officer of Vanda Insights, Vandana Hari made the following statement: "I see only one way out — oil and gas companies need to double down on investment in R&D for carbon capture, utilisation, and storage technology, accelerate pilot projects that can become role models, and pull out all the stops in educating the public about this mitigation technique."

Currently, carbon capture and storage is the only hope for countries who want to keep producing oil and gas. "Unfortunately, others perceive it as nothing more than a cover for continued production and use of harmful fossil fuels," Hari said, "so it's pricey and also gets a poor name." As countries begin to recover from the Covid-19 slowdown, according to Klein, emissions will increase globally at a faster rate in 2022. After a little decline in 2022, Middle Eastern emissions from oil used in industry are projected to climb annually until at least 2040.

The Gulf Collaboration Council (GCC) countries may either improve regional governance and cooperation, or they could team up with world leaders in CCUS to jointly fund CCUS research and development (such as some of the recent initiatives by ADNOC). The expansion of CCUS will be aided in no small part by the widespread dispersal and sharing of relevant information and the development of relevant skillsets. Plans should prioritise regional legal and regulatory issues such as long-term liability for storage, transportation regulation, the treatment of stored carbon under emissions trading regimes, issues of property ownership (including intellectual property rights), and public perception and engagement. Below, we examine some of these legal and regulatory hurdles. Because of the importance of reducing emissions for any climate change plan to be effective on a global scale, CCUS regulatory regimes normally function on two levels: the international, multilateral level, and the national, subnational one. Governments, who do not want national carbon reduction pledges to penalise their own local industries, also desire a level playing field for investors in CCUS projects. The United Nations Framework Convention on Climate Change (UNFCCC; the Paris Agreement) and its annexed Kyoto Protocol are the current international accords addressing climate change. The UNFCCC defined objectives, while the Protocol established industrialised members' legally obligatory emission reduction targets. Because of their higher initial cost compared to more established alternatives, low-carbon technologies necessitate a broad social mandate in order to be widely adopted. Reduce global warming temperatures is the ultimate goal. National goals may include, but are not limited to, being a good "global citizen," ensuring a reliable supply of energy, and decreasing pollution and other adverse environmental impacts. One or more of these may be national goals in some or all of the GCC states.

Most experts believe the Middle East will be able to achieve its zero-net-energy goals

As per the expetrs, "UAE and Saudi Arabia should fulfil their objectives, and I would anticipate Saudi Arabia to do so considerably ahead of its 2060 deadline." Bahrain's aim appears the most difficult at the moment because it has less resources to engage in the transition and downstream industry is a large portion of its small economy.

 To refresh your memory, in October 2021 the Saudi oil and gas giant Saudi Aramco said that it intends to achieve net-zero for Scope 1 and Scope 2 greenhouse gas (GHG) emissions across its activities by 2050, aiding the Kingdom of Saudi Arabia's goal of reaching net-zero emissions by 2060.

Two oil and gas companies controlled by the United Arab Emirates (UAE) unveiled a $3.6 billion project at the beginning of December, in keeping with the UEA's efforts toward its net-zero aim. The companies' off-shore operations will be decarbonized as part of this strategic project to help them achieve their net-zero targets and to back the United Arab Emirates' Net-Zero by 2050 Strategic Initiative.

 Recently, a consortium including Jan De Nul and Samsung C&T won a contract to build cables for the ADNOC-TAQA Lightning Project. By switching from using traditional gas turbines to using renewable energy from the Abu Dhabi onshore power grid, this electrification project is intended to cut ADNOC's offshore activities' carbon footprint by more than 30 percent.

Way forward

As a result of the complexity of the situation, widespread implementation of CCUS technology in the GCC has been gradual. Some are of a technical and financial nature, whilst others are of a legal and regulatory nature, such as the lack of transparency in rules and legislation. Serious environmental hazards, like as leakage, are also linked to CCUS projects. It has been argued that if the carbon extracted from the atmosphere is put to use in EOR, the benefits of CCUS will not be worth the risks involved. While CCUS will aid in maintaining or increasing oil output, many of the businesses now engaged in CCUS and EOR in the region argue that it will also aid in freeing up other gas from reinjection for use in power plants as an alternative for more carbon-intensive fossil fuels like coal or oil. Without minimising the environmental concerns, the oil industry routinely and successfully manages risks similar to those associated with CCUS. Recently, Dr. Al Jaber, CEO of ADNOC, emphasised the importance of pro-growth policies based on a diversified energy mix for ensuring a long-term economic recovery following the covid. Oil and gas will need to be a component of this energy mix for a long time to come if they are to fuel this expansion and guarantee continuing global progress. With CCUS, GCC countries can keep their oil- and gas-based economies afloat and still meet their GHG emission objectives (including CO2) at a fair cost. When carbon is sequestered underground, emissions credits can be distributed through a GCC-based emissions trading market, but credits can be revoked if carbon from sequestration is released into the atmosphere. In addition, the intermittent nature of renewable energy sources can be mitigated by combining CCUS with fossil fuel power generation, which does not increase carbon emissions.