Carbon capture, utilisation and storage (CCUS) has become one of the major talking points in energy as countries around the globe struggle to reduce carbon dioxide (CO₂) emissions and fulfill commitments to reduce production of greenhouse gasses.
The scale
of the impact of national lockdowns and the global economic slowdown caused by COVID-19
has been clearly demonstrated by the significant drop in global carbon emissions
in 2020 declining by approximately 6% (IEA estimate). Carbon emissions are now rebounding
sharply off the back of global economic recovery, governments face the difficult
task of suppressing emissions without negatively impacting economic growth. Application
of CCUS in the oil and gas sector can play a key role in achieving this objective.
The CCUS
Process
Essentially,
CCUS is the process of capturing the CO₂ from an existing industrial process (either
pre- or post-combustion) and subsequently storing the captured CO₂ in subterranean structures, namely either
depleted oil and gas fields or deep saline aquifer formations. It is estimated that
CCS technology can capture up to 90% of the CO₂ emissions produced from the use of fossil
fuels in electricity generation and industrial processes, preventing the CO₂ from entering the atmosphere and contributing
towards climate change.
Furthermore,
CO₂-Enhanced
Oil Recovery (CO₂-EOR)
technology, which has been widely applied in North America, could store around 75Mt
of CO₂ from
CCS projects. It could also enhance oil production from reservoirs deep beneath
the North Sea by 10% to 25%.

CCUS will
be essential until such time as all (or at least most) technology, industrial processes
and power generation become carbon neutral. CO₂ is the primary greenhouse gas, accounting
for approximately 75% of all emissions. The
transition periods required to effect changes are often lengthy, with this in mind,
it is clear that action needs to be taken in order to reduce the impact of CO₂ currently being produced and CCUS has
the potential to play a key role in achieving that goal.
Many of
the locations most suitable for CCUS are in key oil and gas producing countries
such as the US, UK, Norway, Australia, Canada, those in the Middle East and so on.
However, not all sequestration sites currently being utilised/proposed are situated
in former, or current, oil and gas producing provinces, but includes areas where
the geology enables safe, long-term storage and in this regard much of Europe and
parts of Asia, Africa and South America are also potential locations for CCUS to
be implemented.
Century
Plant – Texas, US
Despite
being in operation since 2010, the Century Plant (developed by Occidental Petroleum
and Sandbridge Energy) remains one of the largest CCS projects in the world with
a processing capacity of up to 8.4Mtpa. The Century Plant is a key component of
Occidental’s enhanced oil recovery (EOR) program in the Permian Basin.
The gas processing
facility captures CO₂ from
locally produced gas which is then transported via a 160km pipeline to a CO₂ hub in Denver City before being injected
into the Kinder Morgan Permian delivery system. The CO₂ is injected into oil reservoirs, causing
trapped oil to flow more efficiently, and is permanently trapped within the subterranean
reservoir.
Exxon
Mobil Gulf of Mexico CCS
Exxon
Mobil recently announced a proposal to establish a US$100 billion public-private
CCS project that, if successful, could store up to 50Mt of CO₂ by 2030, with capacity potentially doubling
by 2040. The project, which follows Exxon’s announcement that it had established
a new “Low Carbon Solutions” business, is proposed to be situated in the Houston
Ship Channel and captured CO₂ would
be piped to offshore reservoirs in the Gulf of Mexico. Exxon has projected that
the CCS market could be worth US$2 trillion by 2040.
Gorgon
CO₂ Injection
Project - Australia
Australia
has been a leader in the development of CCUS technology, the Gorgon Project, one
of the world’s largest natural gas project, also incorporates a CO₂ Injection Project which injects and stores
CO₂ in a
deep offshore reservoir, known as the Dupuy Formation, beneath Barrow Island where
Gorgon is located.
The Chevron lead project aims to reduce greenhouse gas emission
from Gorgon by approximately 40% or over 100Mt over the course of the project’s
life. However, since coming into operation in August 2019, the CO₂ Injection Project has been the subject
of recent controversy due to technical issues with the injection system resulting
in substantially lower efficiency than anticipated.
Acorn
Project – UK
The Acorn
Project is backed by Pale Blue Dot Energy, Shell, Harbour Energy and the UK and
Scottish government, as well as the EU. The
project, centred on the St Fergus Gas Terminal in North East Scotland, aims to deliver
a low-cost CCUS system by 2023. Designed to be constructed rapidly by utilising
existing oil and gas infrastructure, Acorn was the first CO₂ appraisal and storage license to be awarded
by the UK’s Oil and Gas Authority. The project comprises a CCUS component – where
existing gas pipelines will be repurposed to take CO₂ from the gas terminal directly to Acorn’s
offshore CO₂ storage
site (the depleted Goldeneye reservoir.
The second
phase of the project focusses on hydrogen production. Acorn Hydrogen will utilise
North Sea natural gas as feedstock and reform it into hydrogen, with the CO₂ emissions being removed and stored using
the CCUS infrastructure. The first Acorn Hydrogen plant is scheduled to come online
in 2025.

Abu Dhabi
CCS – UAE
Earlier
this year, the Abu Dhabi National Oil Company (ADNOC) announced its intention to
expand its existing CCS program, building on its position as one of the world’s
least carbon-intensive oil and gas producers with the goal of reducing its greenhouse
emissions by 25% by 2030.
ADNOC currently operates the Al Reyadah facility in Abu
Dhabi which can capture up to 800ktpa of CO₂ and plans to expand its CCS capacity
by over 500%. In recent months, ADNOC has taken further steps to emphasise its commitment
to the development of CCS by entering into separate agreements with Total and Italy’s
Eni to explore collaboration on CCS projects.
Challenges
and Opportunities
The CCUS
sector will continue to gather pace as carbon emitters (both businesses and governments)
struggle to meet emissions targets and satisfy environmental, social and governance
(ESG) objectives. The oil and gas industry faces significant hurdles in that regard
and it is no coincidence that many of the key CCUS projects currently under development
are being promoted by major hydrocarbon producers. In addition, however, there are
a number of other factors which have the ability to hinder development in the CCUS
sector.
When considered
as a whole, the process of carbon capture is expensive due to significant deployment
and energy costs. In the oil and gas sector
the success of CCUS projects with an EOR element is closely tied to fossil fuels
with the Petra Nova NRG project serving as an example of a project becoming economically
challenging when oil prices are low. On 1 May, 2020, NRG placed the Petra Nova facility
into reserve shutdown status, citing the effects of the global economic downturn
and low oil prices. The project remains closed but NRG will “continue to evaluate
options” as the oil price environment evolves.
What's next for CCUS?
CCUS potentially provides a
solution to one of greatest challenges faced by oil and gas producers, decommissioning.
With the prospect of mature fields reaching end of life, operators across the globe
are keen to offset (or at least delay) the hefty costs associated with decommissioning
oil and gas infrastructure. Existing structures and depleted wells can be repurposed
for CCUS, with the UK’s Acorn Project serving as an example. In addition, CCUS has
the potential to create new revenue streams for oil and gas players by charging
emitters for sequestration.