Carbon Capture and Storage and Enhanced Oil Recovery - An Analysis On The Feasible Carbon Capture and Utilization Strategies For Abu Dhabi Under Uncertainty

Carbon Capture and Storage and
Enhanced Oil Recovery: An Analysis

on the Feasible Carbon Capture and
Utilization Strategies for Abu Dhabi
under Uncertainty
By
Meshayel Omran Essa Lehssoni
A Thesis Presented to the

Masdar Institute of Science and Technology
In Partial Fulfillment of the Requirement for the Degree of
Master of Science
in
Engineering System and Management
© 2013 Masdar Institute of Science and Technology

All Rights Reserved
Abstract
Carbon Capture and Storage (CCS) has been identified as one of the most critical
elements in climate change mitigation as fossil fuel is projected to remain a major
energy source in the coming decades. While worldwide commercial scale deployment
of CCS remains limited due to the prohibitive high cost of carbon capture, Abu Dhabi
is taking the lead in implementing large scale carbon capture from Emirate Steel
Industry (ESI) and Emirate Aluminum (Emal) for Enhanced Oil Recovery (EOR)
executed by the Abu Dhabi National Oil Company (ADNOC) in oil production and
potential permanent storage of CO2 by Masdar at suitable geological formation. This
thesis develops an analytical model to evaluate various carbon capture and utilization
(CCUS) strategies for Abu Dhabi under changing international natural gas price,
international carbon price, and domestic demand for natural gas. The focus is on (1)
identifying financially feasible industrial production, carbon capture, and EOR versus
storage strategies under a given set of international natural gas and CO2 pricing
regimes, and (2) identifying the drift and volatility patterns of international gas and
carbon prices under which carbon capture is financially feasible for Abu Dhabi when
optimal trading decisions of natural gas and carbon can be implemented at any given
time. The analysis shows that, due to differences in CO2 intensity and energy penalty,
CCUS is in general feasible when CO2 is captured only from ESI at high industrial
production rate and the captured CO2 is used for EOR.
ii
This research was supported by the Government of Abu Dhabi to help fulfill the
vision of the late President Sheikh Zayed Bin Sultan Al Nahyan for sustainable
development and empowerment of the UAE and humankind.
iii
Acknowledgments
This thesis would not have been possible without people who have supported me in
the past two years. In the first place I would like to thank my academic advisor,
professor I-Tsung Tsai, for his supervision, advice and guidance. Above all and the
most needed, he provided me constant encouragement and support in various ways.
I would like to record my gratitude to Mr. Mayuram Balasubramanian, from Masdar
Company in Masdar Carbon Unit who greatly enriched my model with knowledge of
carbon capture and storage with his excellent instructions and advising.
I convey special thanks to Dr. Mohammad Abu Zahra, Dr. Mohamed Sassi and
Dr.Toufic mezher for their constructive suggestions and encourage me to carry out
my research as members of my committee.
I would like to thank my colleagues Wail Al Maeeni , Marwan Al Nuaimi and
Abudllah Kaya for their encouragement and support on my study. I am fortunate to
have worked alongside them during the completion of this study.
Lastly, and most importantly, I dedicate this work to my parents. Without their
support I wouldn’t be where I am today.
Meshyeal Omran Lehssoni,
Masdar City, March 21 2013
iv
Contents
_____________________________________________________________________
CHAPTER 1............................................................................................................................. 1
Introduction ........................................................................................................................... 1
1.1 Problem statement ..................................................................................................... 1
1.2 Motivation ................................................................................................................. 2
1.3 Research Objective .................................................................................................... 4
CHAPTER 2............................................................................................................................. 6
Literature Review ...................................................................................................................... 6
2.1 Introduction to the carbon dioxide capture, transport and storage option ....................... 7
2.1.1 Carbon dioxide Capture Technologies ..................................................................... 8
2.1.1.1 Post-combustion capture (PCC) ............................................................................ 8
2.1.1.2 Pre-combustion capture ......................................................................................... 9
2.1.1.3 Oxyfuel combustion .............................................................................................. 9
2.1.2 Carbon dioxide transport ........................................................................................ 10
2.1.3 Carbon dioxide Storage .......................................................................................... 11
2.2 Description of the industrial sectors studied.................................................................. 12
2.2.1 Aluminum sector .................................................................................................... 12
2.2.2 Iron and Steel sector ............................................................................................... 13
2.3 CCS Projects in the United Arab Emirates .................................................................... 15
2.3.1 Emirates Aluminum CCS Project ........................................................................... 15
2.4 Role of Enhance Oil recovery in Accelerating the Deployment of Carbon Capture and
Sequestration ....................................................................................................................... 18
2.4.1. Enhance Oil Recovery Framework........................................................................ 18
2.4.2 EOR and economic context .................................................................................... 19
2.5 The Different Methods of Oil Field Development ........................................................ 20
2.5.1 Primary recovery .................................................................................................... 20
2.5.2 Secondary recovery ................................................................................................ 21
v
2.5.3 tertiary recovery...................................................................................................... 21
2.6 Legal and Regulatory of CCS ........................................................................................ 21
2.7 Clean Development mechanism .................................................................................... 26
2.8 Investment Analysis ...................................................................................................... 29
2.8.1 Net present value (NPV) ........................................................................................ 29
2.8.2 Cash Flow ............................................................................................................... 30
2.8.3 Interest Rates .......................................................................................................... 30
2.8.4 Break-Even Analysis .............................................................................................. 31
2.9 Geometric Brownian Motion (GMB) ............................................................................ 31
CHAPTER 3........................................................................................................................... 33
Model Description ................................................................................................................... 33
3. Methodology................................................................................................................... 34
3.1 Overview of System Dynamic Model ........................................................................... 34
3.2 Model description for Numerical Analysis by SD .................................................. 34
3.3 Process Description of CCS and Process Flow Diagram in EMAL .............................. 36
3.4 Process Description of CCS and Process Flow Diagram in ESI ................................... 43
3.5 Data collection and Assumptions .................................................................................. 45
3.6 Storage site characterizations Data ................................................................................ 47
3.7 Equations of the Model for analysis .............................................................................. 49
CHAPTER 4........................................................................................................................... 55
Static Model (Analysis and Discussion).................................................................................. 55
4.1 Analysis and variables description ................................................................................ 56
4.2 Data Collection and assumption in static model............................................................ 58
4.3 Analysis Results and discussions .................................................................................. 62
4.3.1 Analysis 1: Effects of production capacity expansion............................................ 63
4.3.2 Analysis 2: Effects of Flue Gas Treatment Percentage .......................................... 67
4.3.3 Analysis 3: Effect of CO2 source with production Capacity ................................. 69
4.4 Environmental Impact: .................................................................................................. 71
4.5 Conclusion ..................................................................................................................... 72
CHAPTER 5........................................................................................................................... 73
Dynamic Model (Analysis and Discussions) ............................................................................. 73
5.1 Analysis and variables description ................................................................................ 73
5.2 Data collection and Assumptions .................................................................................. 74
5.3 Analysis Results and discussions .................................................................................. 76
vi
5.3.1 Analysis 1: Effects of production capacity expansion............................................ 76
5.3.2 Analysis 2: Effects of Flue Gas Treatment Percentage .......................................... 78
5.3.3 Analysis 3: Effect of CO2 source with production Capacity ................................. 79
5.3.4 Analysis 4: Decisions Rule ..................................................................................... 80
5.3.4.1 Case 1: Benchmark (No CO2 capture) ................................................................ 81
5.3.4.2 Case 2: Use CO2 for EOR ................................................................................... 82
5.3.4.3 Case 3: Use CO2 for Storage ............................................................................... 82
5.4 Analysis Results and discussion for analysis 4: ............................................................ 83
5.5 Monte Carlo simulation results: .................................................................................... 87
5.6 Break-even Analysis Results: ........................................................................................ 89
5.7 Conclusion: .................................................................................................................... 91
CHAPTER 6........................................................................................................................... 92
Conclusion ............................................................................................................................... 92
6.1 Conclusion ..................................................................................................................... 93
6.2 Prospectus for Further Work ......................................................................................... 93
APPENDIX A ........................................................................................................................ 94
Abbreviations .......................................................................................................................... 94
Bibliography ............................................................................................................................ 96
vii
List of Tables
Table 1: Existing CCS Projects [8] ........................................................................................... 8

Table 2: Description of the carbon dioxide at the end of the pipeline [20] ............................. 10
Table 3: Storage Capacity for alternative geological formation [21] ...................................... 12
Table 4: Depth of deep saline reservoirs and gas field for different projects [20] .................. 12
Table 5: Emission greenhouse gases from primary aluminium unit process (Kg CO2
equivalents) [24]. ..................................................................................................................... 13
Table 6: The initial plant’s rebar rolling mill has a nameplate capacity of 500,000 MTPA,
however, it has demonstrated actual production capacity of 750,000MTPA .......................... 17
Table 7: Potential CDM projects in different sector [44] ........................................................ 27
Table 8: Parameters of the model ............................................................................................ 45
Table 9: Operating expenses of the model .............................................................................. 47
Table 10: Parameters of aquifer and gas oil [20]..................................................................... 48
Table 11: Data Carbon Price USD/Tonne ............................................................................... 59
Table 12: Data of International Gas Price USD/M3................................................................ 60
Table 13: Data of Natural Gas demand for domestic consumption USD/M3 ......................... 61
Table 14: Data of Import Natural Gas from Qatar USD/M3 ................................................... 62
Table 15: Scenarios in Analysis 1 ........................................................................................... 64
Table 16: Energy required for the injection of the different flow rate of CO2 in Ons.DOFG
and Offs.SA for scenarios in Analysis 1. ................................................................................ 64
Table 18: Energy required for the injection of the different flow rate of CO2 in Ons.DOFG for
scenarios in Analysis 2 ............................................................................................................ 68
Table 20: The parameter of the model of carbon price ........................................................... 75
Table 21: The parameter of the model of international gas price ............................................ 75
Table 22: The parameter of the model of international gas price for analysis 1 and 2............ 76
Table 23: The parameter of the model of international gas price and drift. ............................ 79
Table 24: The parameter of the model of international gas price and drift. ............................ 83
Table 25: Different decisions rule in the Analysis. ................................................................. 84
Table 26: The Results of NPV for three decisions rules. ........................................................ 87
Table 27: The Results of probability distribution of for Monte Carlo simulation................... 89
viii
List of Figures
Figure 1 : Schematic representation of carbon capture Technologies .................................... 10

Figure 2 : Different Options for Geological Storage .............................................................. 11
Figure 3: Schematic Diagram of Core Capture Plant ............................................................ 16
Figure 4 : High Level Model structure for EMAL .................................................................. 36
Figure 5: Flue Gas cooling and flue gas blowing systems ..................................................... 38
Figure 6: Flue Gas cooling and flue gas blowing systems Absorption and Solvent Loop
system ..................................................................................................................................... 39
Figure 7: Desorber system ...................................................................................................... 41
Figure 8: High Level Model Structure for ESI ........................................................................ 43
Figure 9: Compression System ............................................................................................... 43
Figure 10: Dehydration System .............................................................................................. 45
Figure 11: Breakdown of cost components- medium scenarios for two cases ....................... 49
Figure 12: Carbon Price paths ................................................................................................ 59
Figure 13: Results of Net CCS Cash Flow for Analysis 1 ...................................................... 65
Figure 14: Results of Net Present Value for Analysis 1 .......................................................... 66
Figure 17: Total emission and CO2 Emission Reduction for analysis 3 ................................. 71
Figure 18: Total emission and CO2 Emission Reduction for ESI industry............................. 72
Figure 19: The structure of the International Gas Price .......................................................... 75
Figure 20: The Revenue Rate under regime 2 ......................................................................... 76
Figure 21: The NPV of different scenarios under regime 1 .................................................... 77
Figure 22: The NPV of different scenarios under regime 2 .................................................... 77
Figure 23: The NPV of different scenarios under regime 1 analysis 2 ................................... 78
Figure 24: The NPV of different scenarios under regime 2 for analysis 2 .............................. 79
Figure 25: The NPV of different project under regime 1 for analysis 3.................................. 80
Figure 26: The NPV of different project under regime 2 for analysis 3.................................. 80
Figure 27: The Net Cash Flow for Case 1 ............................................................................... 85
Figure 28: The Net Cash Flow for Case 2 when the Drift equal to zero ................................. 86
Figure 29: The Net Cash Flow for Case 2 when the Drift has value ....................................... 86
Figure 30: The Net Cash Flow for Case 3 ............................................................................... 87
Figure 31: The result of probability distribution of scenario 2................................................ 88
Figure 34: The Break-even point for scenario 4 ...................................................................... 90
Figure 35: The Break-even point for scenario 10 .................................................................... 91
ix
CHAPTER 1
Introduction
1.1 Problem statement
The phenomenon of greenhouse effect which is also known as global warming is
caused by increasing concentrations of CO2 and other greenhouse gases in the earth’s
atmosphere, due to human activities. When solar radiation is transmitted through the
atmosphere is absorbed by the planet's surface. Part of absorbed energy radiation
radiates upwards as infrared radiation (heat) and part of it absorbed by greenhouse
gases in the atmosphere, which re-emit the radiation energy in all directions, including
back down to the earth’s surface. Therefore, greenhouse gases trap heat radiating from
the earth to cause rising of the earth’s temperature. The raise in global temperature
has caused concerns that other change in rate of change in sea level, precipitation and
change in extreme climate events.
The Intergovernmental Panel on Climate Change (IPCC) highlighted anthropogenic
greenhouse gases such as carbon dioxide (CO2), methane (CH4), nitrous oxide
(N2O). These gases are most important greenhouse gases reached their maximum
recorded level in the 1990s, as the result of combustion of fossil fuels, agriculture, and
land-use changes. Since the beginning of industrial revolution 1750s atmospheric
1
concentration of CO2 has increased from 280 ppm to 389 ppm (parts per million) in
2010 and this level is predicted to increase drastically over the next few decades [1].
The concentration of CO2, CH4 and N2O are still increasing by 0.5%, 1.1% and 0.3%
per year respectively [2].
Industries activates play a significant role in the economic well-being for different
countries and the same time have an impact on the environment as a result of the
increasing emission of (GHG), most notably CO2 , through industrial process due to
energy use has become greater.
The United Arab Emirates (UAE) is considered one of the highest carbon emitter per
capita along with other countries in the Arabian Gulf due to high economic growth
and extreme climate [3].Steel making and aluminum industries are considered the
dominant source of CO2 emissions in the United Arab Emirates (UAE). But, the
country has already taken different actions and practices to reduce (GHG) and
enhance country’s economic development, simultaneously. The United Arab Emirates
cannot sharply boost its crude output due to Opec production quota agreement and the
country requires on imported natural gas from Qatar in order to meet domestic
demand by Dolphin Pipeline.
1.2 Motivation
In recent times, different efforts are directed to limit global warming and climate
change by reducing anthropogenic CO2 emission in the atmosphere. In 1992, Global
cooperation on mitigating climate change was initiated through stabilizing the man-
made greenhouse gas concentration in the atmosphere by The United Nations
Framework Convention on Climate Change (UNFCCC). In 1997, Kyoto protocol,
which is an international agreement, was signed under UNFCCC which aim to reduce
the greenhouse gas (GHG) emissions for developed countries by 5.2% from their
2
1990 level by the target period of 2008-2012. Different mechanisms under Kyoto
protocol are used in meeting the target such as Joint Implementation (JI), Clean
Development Mechanisms (CDM) and Emission Trading (ET).
There are many climate change reduction options that have been projected to cut of
CO2 emission from major source, consisting of employing energy efficiency,
widespread use of renewable energy (commercial biomass, geothermal, wind, and
solar energy), nuclear power, carbon-free or reduced-carbon energy resources, new
transport technologies and carbon capture and storage (CCS)[4]. Many technologies
such as carbon capture and storage have been demonstrated in order to remove CO2
from flue gases. The CO2 can be separated during or after the production process and
transported to safe geological storage rather than being emitted to the atmosphere.
According to the The International Energy Agency (IEA) deployment of low carbon
energy technologies could reduce projected 2050 emission to half 2005 levels and
around one fifth of those reductions will be by using CCS. To achieve this target
around 100 projects of CCS will be implemented by 2020 and more than 3000
projects by 2050 [5].
The UAE country accedes to the United Nations Frame Work Convention on Climate
change (UNFCCC) as Non-Annex 1 Party to the convention. Different efforts from
Abu Dhabi government establish the solidarity with the international community in
tackling the threat of climate change through ambitious plan to capture CO2 at a large
combustion source of carbon emitting industrial plants.
The UAE is facing a growing gas shortage due to a strong domestic demand that
exceeds a available supply [6]. OPEC’s quota system limits the world oil production
and the associated gas production is closely tied with oil output production. Since
2009, the UAE has taken a step to import natural gas from the north field gas of Qatar
3
country under dolphin project and increase energy production in order to secure the
energy for the future. The UAE strives at ways to reduce depending on 40 percent of
the 5 billion cubic feet of natural gas the produced daily in the country and use CO2
to partially replace natural gas for enhances oil recovery operations [7]. In the
economic context, if carbon dioxide is captured and utilized for enhance oil recovery
purposes this will help to produce incremental oil and increase the economic value
added through generate revenue from substitution of gas with CO2 for EOR (value-
added from CO2 for EOR) that will provide more natural gas for domestic use or
export the surplus of associated gas into international market or can generate revenue
from carbon credit under Clean Development Mechanism if carbon price is
competitive (CDM).
1.3 Research Objective
The dissertation intention is to develop economic model to evaluate various carbon
capture and utilization (CCUS) strategies for Abu Dhabi under changing international
natural gas price, international carbon price, and domestic demand for natural gas
under dynamic and static models. The focus is on (1) identifying financially feasible
industrial production, carbon capture, and EOR versus storage strategies under a
given set of international natural gas and CO2 pricing regimes, and (2) identifying the
drift and volatility patterns of international gas and carbon prices under which carbon
capture is financially feasible for Abu Dhabi when optimal trading decisions of
natural gas and carbon can be implemented at any given time.
This thesis investigates the probability distribution of uncertain variables such as the
price of natural gas and carbon in estimation of NPV and evaluation of NPV using
Monte Carlo simulation for some strategies. At the end of the study, all possible net
present values and their probabilities are given as a probability distribution.
4
The methodology for the economic assessment is based on System Dynamic (SD)
model which is known as a tool for analysis of long-term, complex feedback systems
in managerial, organizational and socioeconomic context.
The remainder of this study is organized as follows: Chapter 2 focuses on literature
review of the three CCS technologies; description of the industrial sectors studied and
enhances oil recovery (EOR) purposes with Masdar Carbon projects and Investment
Analysis. Chapter 3 gives an introduction of SD modeling in order to show how this
study can be analyzed by using this model. Chapter 4 and five illustrates:
1- The simulation results for different analysis for static and dynamic models.
2- Discuss the results of economic model.
Finally, Chapter 6 concludes this research by providing recommendations and
prospectus for future work.
5
CHAPTER 2
Literature Review
The purpose of this chapter is to give introduction of carbon capture and storage
technology, and emphasize on the steel and aluminum industries that consider a main
sources of carbon dioxide gases in the industrial sector and the cases of Emirates
aluminum smelter complex (EMAL) and Emirates steel industries (ESI) in the United
Arab Emirates. It also reviews literature on the subjects of Enhance Oil Recovery
(EOR), legal and regulatory of CCS as well as Clean Development mechanism
(CDM). Also this chapter highlights the investment analysis to examine the feasibility
of each strategy.
6
2.1 Introduction to the carbon dioxide capture, transport and storage option
Carbon capture and storage is one of promising capture strategy to mitigate global
climate change whereas permitting fossil fuels to meet the world's pressing energy
demand. Fossil fuels will continue to dominate the world’s primary energy supply for
decades and it account for 85% of all primary commercial energy and 15% is made up
of nuclear energy, hydroelectricity and renewable energy [8].
CCS is a three step process consisting of (i) the separation of CO2 at some large point
source: fossil fuel power plants, fuel processing plant and other industrial plants such
as steel, cement and ammonia production facilities plants, (ii) the transport of the
captured and compressed CO2 by pipelines, and (iii) storing it in the geological
structure (Deep saline reservoirs, Coal beds, Depleted oil and gas fields) in manner
that guarantees its long-term isolated from atmosphere in a secure location.
Geological sequestration considers first option for carbon storage as the result of the
enormous underground capability and relatively mature injection technology [9].
There are two methods of CO2 sequestration: direct and indirect sequestration, the
direct sequestration appears when the gas is captured in the generation place before
being released into the atmosphere and store it in geologic formation or oceanic
environment. While, indirect sequestration, the gas is captured after being emitted to
the atmosphere [10].
According to Energy Technology Perspectives 2008 analysis, in the absence of new
policies or increase of using the fossil fuel the amount of CO2 emissions will increase
by 130% above 2005 level by 2050. Thereby, the CCS technology is the only way to
limit greenhouse gas (GHG) emission from major sources [5]. As mentioned above,
7
one-fifth of emission will be reduced by using CCS in 2050 in order to reach
stabilization of GHG concentration after evaluated different strategies by ETP BLUE
scenario by 50% by 2050. By 2030, 350 million tones of CO2 per year will be
reduced in the US power sector only under the context of wide deployment of CCS
after 2020 [11]. CCS will play a major role as emission reduction. Globally, there are
several demonstrated projects are in operation involve CCS technologies such as
Sleipner, Snohvit in Norway, Weyburn in Canada and In Salah in Algeria [12]. see
Table 1 below.
Table 1: Existing CCS Projects [8]

Project Leader Location CO2 source CO2 sink
Sleipner (1996) Statoil North Sea, Gas Processing Saline
Norway Formation
Weyburn (2000) Pan Canadian Saskatchewan, Coal Enhanced oil
Pan Canada Gasification Gas Recovery
In Salah (2004) BP Algeria Gas Processing Gas Reservoir
Snohvit Statoil Barents Sea, Gas Processing Saline
Norway Formation
2.1.1 Carbon dioxide Capture Technologies
CO2 capture systems are usually classified into three different methods: pre-
combustion capture, post-combustion capture and oxyfuel combustion. Figure 1
explains a block diagram for these three methods. At present, the CO2 concentration
above 99%, in spite of less concentration of CO2 can be accepted [8]
2.1.1.1 Post-combustion capture (PCC)
In -combustion capture, CO2 is captured from flue gas produced by combustion
processes just before they released to the air. Solvent scrubbing would normally be
used to react with CO2 in the flue gas that regenerated at higher temperature to
produce a high-purity CO2 stream suitable to be compressed and transported to secure
geological storage locations [13]. International Energy Agency’s (IEA’s) reports
8
(CCS Roadmap) that other methods such as member separation, chemical looping
and solid adsorption process are also being considered but these are not advanced
stage of improvement and requier to enhance the overall efficiency of the process in
the future [5].
2.1.1.2 Pre-combustion capture
The principle of Pre-combustion systems process is reaction of fuel with oxygen to
produce synthesis gas is mainly a mixture of hydrogen (H2) and carbon monoxide
(CO). Water-gas shift (WGS) reactors converts the CO into CO2 through reforming
with subsequent. Then, CO2 stream is captured from the mixture of (H2 – CO2) for
compressing and transporting it to secure storage, whereas H2 is served for power
production[14]. In addition, pre-combustion technique consists of separating carbon
dioxide before the fuel is burned and it can be applied on IGCC power plant
(Integrated Gasification Combined Cycle) [15].
2.1.1.3 Oxyfuel combustion
In the oxyfuel concept, recycled flue gas enriched with pure oxygen as an alternative
to air for fuel combustion, oxygen is supplied by an Air Separation Unit (ASU).
Thereby, produce flue gas contains a CO2 rich gas and condensable water vapour,
which can easily be separated and cleaned during the compression process and not
need any extensive treatment due to its mass reduction (owed to N2 absence) [16, 17]
Flame temperature is affected by molar heat capacity and that moderated by using
recycled flue gas and increasing the oxygen concentration to achieve similar flame
temperature of air combustion [18, 19].
9
Figure 1 : Schematic representation of carbon capture Technologies [13]
2.1.2 Carbon dioxide transport
The transport of CO2 is considered the intermediate stage between capture and
injection process. The captured CO2 can be transported using pipelines or truck, train,
and ship. A large quantity of CO2 is most economically achieved with pipeline which
being considered the favored method to transport the gas at high pressure pipeline
network like in a weyburn project. During the transporting, CO2 exists in the heavy
liquid or supercritical phase (i.e. above 31 C and 7.38 MPa) [8, 16] see Table 2.
Table 2: Description of the carbon dioxide at the end of the pipeline [20]
Pressure P bar 80
Temperature T °C 40
Density Ρ kg/m3 277.9
Mass flow rate M Kg/s 2.50E+02

CO 2
Over 30 years, there is a major experience with transporting over 30 metric tonnes
(Mt) of CO2 from natural and anthropogenic sources through 6200 Km for enhance
10
oil recovery purposes in the USA and Canada [5]. In literature, there is no momentous
witness of corrosion for more than 20 years and the pipelines are operated under strict
constraint on contaminants, mainly free water, H2S, S compound and oxygen. [17]
To meet the challenge of the future of transport technology, regional planning
exercises and develop inducement for the formation of CO2 transport hubs will be
required from the government to develop long-term strategies for CO2 source clusters
and CO2 pipeline networks that optimize source-to-sink transmission of CO2 [5].
2.1.3 Carbon dioxide Storage
The final step of CCS is injected the captured CO2 into a geological formations at
depth of greater than 1 km and isolated from the atmosphere for geologically
significant periods of time in the order of centuries to millennia [13, 18, 19] see Table
3. The captured CO2 can be stored in depleted oil, gas reservoir, deep saline
formation and unmineable coal beds and the scale of injection rely on the emission
cap, climate change policies and affordability of each individual country [9].
Figure 2 : Different Options for Geological Storage [21]
11
A saline formation is expected to provide the chance to store a large amount of CO2,
followed by oil and gas reservoirs. As predicted in the Blue Map scenario, there will
be require to be adequate storage capability to store over 1.2 GTCO2 in 2020 and 145
GTCO2 in 2050 [5].
Table 3: Storage Capacity for alternative geological formation [21]
Storage Option Storage Capacity

(GtCO 2 )
Unminable coal beds 3-15
Oil and gas fields 675
Deep saline formations 1000
Table 4: Depth of deep saline reservoirs and gas field for different projects [20]
Project Location Depth Reservoir

Sleipner North sea, Norway 800-1000 Aquifer
In Salah Algeria 1800 Gas field
CASTOR The Netherlands 3500-4000 Gas field
Thaynes formation Uinita county, Utha, 900 Aquifer
USA
2.2 Description of the industrial sectors studied
2.2.1 Aluminum sector

The world witnessed that the aluminum is used expensively for different sectors such as
transportation, construction and domestic applications. Aluminum metal is most used after
steel metal due to it is flexible properties [22] Worldwide, around 1 percent of total
anthropogenic greenhouse gas emission was caused by production of primary aluminum [22]
Around 391, 364 million tones CO2-E of total GHG emissions from aluminum industry were
generated in 1990 and 1995, respectively [23]. Aluminum production considers as a main
industry in many industrialized countries and is a major contributor to industrial greenhouse
emissions due to the relatively intensive energy consumption of the process, mainly in the
smelting stage with amount of 46% of total CO2 emission. Also high energy is required
12
during the aluminum production from ore (bauxite) than other metal and generates a large
amount of greenhouse gases [22]. CO2 emissions include PFC compounds and CO2 which
differentiated and presented as CO2 equivalents. An indication of total CO2 emissions for the
different primary aluminum production processes is presented Table 1.1.
Table 5: Emission greenhouse gases from primary aluminium unit process (Kg CO2
equivalents) [24].
Bauxite Refining Anode Smelting Casting
Process 45.70% 16.61%
Electricity 5.85% 7.42% 59.25% 20.90%
Fossil Fuel 33.33% 79.51% 15.90% 1.36% 42.10%
Transport 66.67% 6.16% 0.94% 0.04% 37.00%
Ancillary 8.48% 30.04%
PFC 22.74%
Total (kg) 48 991 849 9, 789 368
Per tonne Al 248 1908 374 9, 789 368
2.2.2 Iron and Steel sector
Economic growth normally comes with rapid increase of demand for steel. From 1945
to 1990 the global steel production raised approximately from 100 million tonnes per
year to 770 million tones per year. By 2020, the predicted steel production may
increase to 1280 million tones [23]. As mention in the literature review the emissions
of CO2 is a serious problem for the steel industry as steel production greatly depends
on fossil fuels as energy source and limestone to purify iron oxides [24].
Globally, there is a large different between CO2-emission factors of steel production
due to differences in production technology, process, and fuel inputs. Changqing, et
13
al. (1995) and IEA Greenhouse gas R&D program,.(2000) claim that the steel
industry contributes about 6%-7% of total anthropogenic emissions, which is
equivalent to 1442 Mt of CO2 [23, 24]. In 2004, steel sector emits about 590 Mt-C
accounting for 5.2% of the global anthropogenic GHG emission. Additionally, steel
sector are considered one of the most energy intensive end-use sectors [25]
There are four major steel making routes in steel production, which can be
categorized as primary integrates steel mill, scrap-based minimill, direct reduction-
electric melting mill and blast furnace-open hearth plant. Integrates steel mill and
scrap-based minimill account for about 60% and 30%, respectively, so are the
dominating processes used in steel production. In the study undertaken by [26], during
the iron-making process in primary route, the iron ore is reduced using coke and
injected fuels to produce pig iron in the blast furnaces and then convert it into crude
steel in basic oxygen furnaces. Therefore, during iron making process is considered
the most energy intensive step in steel production. On the other hand, melting scrap
requires less energy in secondary steelmaking process as iron production is not
needed in this process. For integrated steel mills, emissions primarily produced from
the blast furnance (70%). The remaining CO2 emissions arise from rolling and
finishing of products (12%), ore preparation (12%) and oxygen and power production
(7%). By contrast, in scrap based mini-mills route the main emissions are from the
electric arc furnace (45%), finishing and rolling (36%) and oxygen/power production
(16%). Therefore, the associated emission of CO2 is various according to production
process.
Total CO2 emission per tonne of steel production varies with the production route as
well. For example, during integrated steel mill route produces 1.6-2.2 tonne CO2 per
tonne steel that associated with the production on one tonne of steel and scrap based
14
production in a mini-mill emits 0.6-0.9 tonne CO2 per tonne steel. Whereas, scrap
substitutes (DRI) in a mini-mill produces 1.4-2 CO2 tonne per steel product [23].
The energy consumption varies from 19 to 40 GT/tcs in integrated primary steel mills.
Direct reduction-electric (DR-EAF) has lower specific energy consumption (SEC) as
it employs newer and more efficient technologies developed over the past 25 years.
Worldwide, in 1990 he average SEC for steel manufacture is assumed to be on the
order of 24 GJ/tcs3 [23]. In order to achieve significant reductions of CO2 emissions
to the atmosphere from the steel industry, introductions of novel carbon reduction
technologies such as carbon capture and storage (CCS) are required[27]. CCS has a
great potential in the steel industry due to high generation rates of stream rich in CO2
or in some cases pure CO2 in different stages of the production process [28]. Cheng
et al. (2010) state that to cope with the worldwide CO2 reduction demanding it is
necessary to capture CO2 from the exhausted gases in steel making processes since
this industry accounts for 9% of total emissions [29].
2.3 CCS Projects in the United Arab Emirates
2.3.1 Emirates Aluminum CCS Project
Emirates aluminum smelter complex project in Al Taweelah, Abu Dhabi, is a joint venture
between Abu Dhabi’s Mubadala Development Company and Dubai aluminum Company
DUBAL to provide the globe with high quality metal such as sow, standard ingots, sheet
ingots and extrusion billets. The company is using DX Reduction Cell Technology to produce
750,000 tonnes of aluminum annually in the first phase of EMAL project. EMAL is seeking
to increase it is production to 1.3 metric million tonnes by the end of 2014 upon completion
of phase II after introducing DX+ Reduction Technology. Phase two will make EMAL the
world’s largest free standing aluminum smelter.
15
During the phase two of EMAL production would contribute around 10 Mt CO2 eq/y to GHG
emission. Table 1.2. About 6% of the UAE’s emission is come from smelter process of
aluminum. Many efforts in the area of energy conservation and emissions reduction appear in
their facilities to sustain aluminum industry.
The EMAL-Masdar Carbon Capture Project develops a post-combustion carbon capture plant
at the EMAL aluminum smelter complex in order to capture about 1.8 million tonnes per
annum of CO2. Once CO2 is captured, it is compressed and then purified before it is
transported with pipelines to oil reservoirs for enhance oil recovery (EOR) operations.
EMAL post-combustion CO2 capture process mainly consists of the absorption/desorption
process with a chemical solvent which is Amino Acid Salt (AAS) for selective separation of
CO2 from flue gases that comes from Turbines/HRSGs (Heat Recovery steam generations)
11 and 12 of the EMAL Power Plant. For EMAL core carbon capture plant process has been
analyzed in a commercial process model, Aspen Plus, which is commonly used for conceptual
design of the production process and concept of capture plant as shown in Figure 1.
Figure 3: Schematic Diagram of Core Capture Plant
16
2.3.2 Emirates Steel CCS Project
In United Arab Emirates country, collaboration between Masdar Company and Abu
Dhabi National Oil Company (ADNOC) to reduce the emission of CO2 from emirates
steel project in order to EOR operation in the future. Emirates Steel Industries (ESI)
is considered as one of the three industrial plants where Masdar is planning to set up
carbon capture facilities as part of Phase 1 of the CCS Project at Mussafah .
Emirates steel industry established in 2001 which is wholly owned by the government
of Abu Dhabi to full the growing demand for quality steel products for the UAE in
particular in reinforcing steel bars (re-bars). The industry has a design capacity of
600,000 metric tons per annum (MTPA). To date, the factory undertaking a major
expansion projects in two phases to increase rolling capacity and establish the factory
as a fully integrated plant instead of a re-roller plant. The installation of a new Direct
Reduced Iron (DRI) based plant is included in Phase 1 expansion plant that has a
capacity of 1.6 million tons per year that scheduled to started-up in june 2009.
Whereas, phase 2 expansion has the same capacity and started-up by end 2011. Both
of expansion phase 1 and phase 2 designed as ESI-1 and ESI-2, respectively. Table 6
Table 6: The initial plant’s rebar rolling mill has a nameplate capacity of 500,000
MTPA, however, it has demonstrated actual production capacity of 750,000MTPA
Capacity Initial Plant Phase1 Phase2 Total

Expansion Expansion
Direct reduction 1600000 1600000 3200000
plan
Electric Arc 1400000 1400000 2800000
Furnace
Ladle Furnace 1400000 1400000 2800000
Continuous 1400000 1400000 2800000
caster
Rebar Rolling 750,000 750,000 1500000
Mill
17
Wire Rod 500000 500000
Rolling Mill
Sections Rolling 1000000 1000000
Mill
Both of ESI-1 and ESI-2 design are producing 0.8 MMTPA of wet CO2 as a
consequence of the iron reduction reaction. Therefore, the project strives to install
CO2 adjacent facilities such as CO2 compression and dehydration in order to capture
0.8 MMTPA of CO2 and transport the gas through pipeline network to onshore oil
reservoirs for EOR operations. The target of CO2 compression and dehydration
system is to compress low pressure (0.35 barg) CO2 to pipeline pressure 190 barg and
dehydrate the CO2 gas to highest adequate water content for transportation and use it
in EOR purposes. ESI consists of two separate steel plants located about of 2 km
apart. Two compression and dehydration trains are identical will be located within
common areas that serve each plant separately. ESI-1 locates around 2.5 km and ES1-
2 locates around 1.5 km from the common area. At the ESI facilities the new direct
reduction plants (DRI) will supply CO2 feed stream (90%) by amine based CO2
removal units that part of the direct reduction plants. a Thermal Oxidizer is provided
in existing site facility in order to disposal of sour CO2. In addition, a Thermal
Oxidizer requires to be maintained in a hot standby mode to receive the CO2 feed.
2.4 Role of Enhance Oil recovery in Accelerating the Deployment of Carbon

Capture and Sequestration
2.4.1. Enhance Oil Recovery Framework
Enhance oil recovery (EOR) is a technique that linked to the recovery of additional oil
to naturally produce. In this technique inject the fluid at high pressure to mix with
some fraction of oil in a manner that increases the improvement of oil mobility and
extracts more oil from mature oil field [10]. The focus of sequestration on gas and oil
fields refers to the secure storage location due to their historic record of trapping
18
buoyant fluids for millions of years. The main Properties for oil reservoirs to indicate
a safe storage locations are capacity, injectivity , lithology and caprock integrity [30]
EOR represents one of the different options that restrains greenhouse gas (GHG)
emissions into the atmosphere through disposal of CO2 in oil reservoirs. Also this
method will help the employment of fossil fuels as energy recourse in a more
sustainable shape [10].
Leach et al (2011) claim that injection of CO2 reduces the oil’s viscosity, thus
enhance its ability to flow through the reservoir rock [31]. United State has about
four decades of experience with carbon capture and geologic storage of CO2 [32]. At
present, around 71 projects are using the gas of CO2 and produce over 170000 barrels
of oil a day globally [33]. A huge quantity of CO2 and infrastructure of CO2
pipelines, injection wells and related surface handling facilities will be needed in
order to achieve successful CO2-based EOR operations [32].
Over forty years, oil and gas industry have used CO2-EOR, recently the CO2 -EOR
becomes a potential for carbon sequestration. There are many reasons behind using
EOR operations for oil field which are low cost, technological availability and obtains
revenue from additional oil produced.
2.4.2 EOR and economic context
Carbon dioxide (CO2) injection has been used for enhanced oil recovery in oil
reservoirs at the west Texas since the 1972 [34]. The CO2 has an economic value
through EOR process that indicates the enormous scale applications and petroleum
reservoirs indicates significant sinks for CO2 [30]. Over the past 10 years, the number
of EOR projects has increased and natural supplies are becoming depleted due to oil
prices have raised strictly. In 2009, CO2 was purchased around 60 million metric tons
19
(tons) double than 2004 and 10 million tons was coming from anthropogenic sources.
From 1986 to 2008 the role of EOR has increased from 0.3% to 5%, respectively [34]
There is strongly relation between the cost of oil recovered and purchase cost of the
CO2 injected and the total quantity of CO2 has reduced to recover each barrel of oil
by the effort of reservoir engineering design note that an average of 1.5 barrels of oil
are produced by EOR that relies on each ton of CO2 and this delineates a US$ 38
investment in CO2 for EOR returns oil valued at more than US$ 100[34, 35].
It is anticipated that with one tone of CO2 injection in oil well produces from 2 to 8
barrels of oil that relies on the oil well structure and pressure of operations [36]. One
barrel of oil can be produced due to inject of between six to twelve thousand cubic
feet of CO2 which is the rule of thumb in the EOR industry [32]. In 2010, Regard to a
report of the Natural Resources Defense Council states that with no constraint on CO2
supply the oil production from CO2 based EOR operation may reach 3.0 to 3.6
million barrels a day by 2030 [32].
2.5 The Different Methods of Oil Field Development
There are different methods for oil recovery stated as following:
2.5.1 Primary recovery

Primary recovery is the first stage applied technique to extract heavy oil and gas from
reservoir and it is end when the pressure is too low. Under natural driving pressure
(natural pressure of the trapped fluid), the oil is pump to well production then to the
surface and around 5-25% of OOIP (Originally Oil in Place) is recovered in this phase
that based on geological characteristics and reservoir pressure [37].
20
2.5.2 Secondary recovery
Secondary recovery considers as initial stage for enhanced oil recovery when the
primary recovery reached it is economic limit. It is consists of inject gas fluid and
water fluid into the reservoir to maintain a pressure in order to move the oil to the
surface. It increase the amount of oil produced from 6 to 30% of OOIP [37].
2.5.3 tertiary recovery

The last technique is employed when the oil fields reached the end of it is life and it is
called tertiary recovery also known as enhanced oil recovery (EOR) or Improved Oil
recovery (IOR) that produce additional oil between 5-15% of OOIP by introducing
fluids such as gas, steam and air etc in order to reduce the viscosity and improve flow
of the oil.
2.6 Legal and Regulatory of CCS
One of the key barriers to slow or prevent CO2 geological sequestration activities is
the absences of a comprehensive regulatory framework [9]. To establish a framework
conducive to a large-scale CCS implementation it is require highlighting different
categories of legal and regulatory issues such as Intellectual property (IP), property
and regulatory [38]. Additionally, There are many regulatory issues are required to
address in order to protect public health, safety and environment and to make sure of
stewardship for permanent CO2 storage [39].
In the study undertaken by Mace, et al. (2007), no clear worldwide regulatory
framework applies to carbon capture and storage activities undertaken for the aim of
greenhouse gas mitigation [18]. (Remarkably the UN Framework Convention on
Climate Change, the Kyoto Protocol and the EU’s Monitoring and Reporting
Guidelines) highlight few frameworks of CCS activities, and exclude them from their
context. Several individual international, regional and EU legal frameworks are
21
potentially related to CCS activities. Many designation and prohibitions within these
frameworks are adequately wide to include and regulate CO2 capture and geological
storage activities, although the absence of an overarching framework for CCS [18].
Lately, legal instruments were amended to advance CCS development [5]. These legal
frameworks use different terms such as ‘pollution’, ‘land-based pollution’, ‘wastes’,
‘hazardous wastes’, ‘industrial’ wastes’ to describe their scope and regulate particular
activities.
An example of international framework, London Convention (1972) is an
international agreement between countries that intends to prevent pollution of the sea
by the dumping of waste that is includes CO2 gas as a waste. Study was conducted by
the Joint Group of Experts on the Scientific Aspects of Marine Environmental
Protection (GESAMP) noted that dumping of both liquid and solid CO2 is forbidden
by both the London Convention and London Protocol [18]. Whereas, The OSPAR
Convention is a regional agreement and address the effects on the marine environment
of ocean acidification due to increase level of CO2 in the air and proposed that risk
and effect of leakage CO2 of stored in geological structures would have to be raise
atmospheric levels of CO2 [18].
The UN Framework Convention on Climate Change provides guidance for estimating
emissions from the additional fossil fuels used for CO2 capture, compression,
transport and injection of CO2. In spite of these guidelines, reporting maybe
challenging where leakage rates from storage sites are unidentified, where geological
storage sites merge CO2 from diversity of installations or for several of reasons such
as enhance oil recovery, disposal and storage [18]. Also a firm commitment for
parties was not included with regard to CCS by the UN Framework Convention on
Climate Change [5].
22
The author also point out that different regulatory issues must be highlighted if carbon
dioxide capture and storage is to continue on a large scale such as the lack of criteria
for monitoring and reporting captured and stored CO2, and monitoring techniques to
comply with these criteria, the absence of a suitable liability regime tailored to CCS,
environmental impact assessments and engaged with public participation in decision
making. Lack of information on the long-term has impacted of geological CO2 storage
on the environment and economic incentives[18]. (Mitrović & Malon, 2011) claim
that in some communities, public have legitimate concerns about the risks and
benefits of CCS projects must be addressed[40].
Many authors discussed CCS regulations and policies have developed by
governments in a number of countries and in international conventions in order to
encourage the demonstration and commercial use of CCS [41]. Clearly,
Comprehensive domestic regulatory frameworks have developed in many countries
and legal frameworks have advocated enable CCS implementation either licensing
regimes or regulatory support for the financing of demonstration projects [5] In the
study of Praetorius and Schumacher (2009) a number of detailed problems were
involved under any legal framework for CCS has to be solved and each process step
of CCS has tackled by legal conditions [42].
According to Praetorius and Schumacher (2009) on a global level, activities for
establishing the important regulatory framework have been in progress for a couple of
years now. As suggested by the IPCC and early IEA activities on legal aspects to
involve the guidelines for including CCS into global greenhouse gas inventories[42].
In 2004, the International Energy Agency (IEA) launched a project to inform and
engage regulators and other experts on different legal aspects of CCS. The target of
23
this project is to inform the development of legal and regulatory frameworks for CCS.
After that in 2008, potential CCS regulators were provided and afford them the
chance to discuss feasible solutions and challenges they face in developing sufficient
CCS legal and regulatory frameworks by initiate of the International CCS Regulators’
Network [41].
Other programs such as Carbon Capture Legal Programme (CCLP) and the IEA
Greenhouse Gas R&D Programme (IEA GHG) were launched to support an
authoritative source of objective, up-to-date and comprehensive information on CCS
and enhance the development of regulation for CCS, respectively [41]
National and regional legislators aimed to develop dedicated CCS legislation during
the past twelve months. From the European Union, United States and Australian
legislators provided legislative proposals for the regulation of CCS activities and
discussion regarding further critical legal issues for CCS [41].
First example of devoted CCS legislation was launched by the European Commission
in January 2007, which aims a dictate setting out a framework regulatory regime for
the geological storage of carbon dioxide. Identical proposal have been designed in the
United States and Australia. For European Directive on the Geological Storage of
carbon dioxide sets out a regulatory regime for the permitting of exploration and
storage, and establishes criteria for the selection of storage sites. Also, this proposal
emphasize on geological storage of carbon dioxide and makes amendments to existing
legal instruments to regulate the capture and transport aspects of the technology.
Within United State, Federal Rule for CO2 Geological Sequestration Wells
planned by the US Environmental Protection Agency’s (EPA), it is target to inject
CO2 into the subsurface for the purpose of long-term storage and based on the existing
24
Underground Injection Control (UIC) regulatory framework, which enhance the
protection of underground sources of drinking water.
In Australia, The Offshore Petroleum Amendment (Greenhouse Gas Storage)
support with certainty for operators regarding access and title to offshore greenhouse
gas storage formations, while also ensuring that storage is protected and secure.
Injection License will regulate the Actual greenhouse gas injection that focue on a
comprehensive site plan. Suitable minister will received reports at the end of the life
of the site with suggestions for monitoring, measurement and verification. Also, the
holder will have statutory liability until a ‘site closing certificate’ has been issued.
[41].
According to Yeddu et al., (2009), since 1980s the pipeline has been used to
transport CO2 in west Texas for EOR from several locations outside Texas with inner
diameters from 20 to 30 inches that covers distance 295-803 km and carry CO2 (97-
98% pure) [43]. Framework for CO2 pipeline regulation is one of the regulatory issues
was discussed to enhance the widespread commercial deployment of CCS technology.
At the state level, to ensure safe operation CO2 pipelines are generally subject to
federal and state regulation. Standards design were establish and enforced by the
Federal Pipeline and Hazardous Materials Safety Administration (PHMSA) within the
Department of Transportation in order to make sure about appropriate design and safe
operation of CO2 pipelines transporting supercritical CO2 fluid [32].
Federal economic regulation is not exist for CO2 pipelines, also as is the case
with oil pipelines it has no federal sitting program and no ability to get a federal grant
of well-known domain power to obtain private property for pipeline right of way
25
purposes. Also, different laws agree to use of a prominent domain power for the
acquisition of CO2 pipeline right under varying terms and conditions [32].
2.7 Clean Development mechanism
Clean Development Mechanism (CDM) was defined in Kyoto Protocol that allows for
emission reduction in a cost-effective way between the industrialized (Annex I) and
developing (non-Annex I) countries [44]. This Mechanism helps the market to find
the cheapest way to reduce the emission.
Certified Emission Reductions (CERs) which is standard unit and a form of carbon
credits shows the GHG reduction by one of the CDM project. Any Reduction of GHG
by using methods of CDM project will gain (CERs) which is form of carbon credits.
This allows trading of emission reductions that are resulting from a particular project
and allows countries to use the CERs to meet their goals. Therefore, these countries
will gain money to the project that reduces the GHGs. In table 7 shows Potential
CDM projects in different sector.
In 2008, around 1077 CDM projects were registered by non-Annex I countries and
1085 by Annex I countries. 54.28% of these projects were energy industries projects
which focus on zero emission energy from fossil fuels and renewable source.
In the United Arab Emirates country, Masdar Initiative is one of the CDM project
driven by Abu Dhabi Future Energy Company (ADFEC) and has registered in the
United Nations. Masdar’s is Special Free Zone (SFZ) known as sustainable
environment that relies on renewable energy (RE) as a major source of energy and
requires around 230 Megawatts. 90 percent of energy comes from photovoltaic (PV)
technology that installed on the roof of the building, while 10 percent comes from
26
other source of RE technologies such as concentrated solar power (CSP), biomass,
and geothermal energy. Other investment project under ADFEC’s umbrella projects is
Shams 1 project (100MW) that built in Zayed city and operates through CSP
technology. Different projects have invested abroad the country in sustainable manner
under ADFEC such as a thin film manufacturing plant in Germany and Abu Dhabi,
London Array offshore wind farm and a wind turbine manufacturing plant in Finland.
In addition, the government of Abu Dhabi strives to integrate CDM projects in oil and
gas sector to reduce CO2 per capita emissions [45].
Table 7: Potential CDM projects in different sector [44]
Sectors Potential projects/activities
Agriculture Improvement in cultivation practices to reduce
methane emissions.
Reduction of energy use through demand side
management.
Improvement in use of agrochemical.
Building (residential, Energy efficient design of buildings.
commercial Energy efficient appliances.
and government) Energy conservation measures.
Fuel switching in households and commercial
boilers.
Use of renewable energy sources.
Energy (nuclear energy, Development of renewable energy sources
excluded from CDM) (hydro, solar, wind, biomass, etc.).
27
Clean coal technologies.
Fuel substitution measures.
Improvement in power transmission and
distribution network.
Reduction of leakage in transport, handling and
distribution of oil and gas.
Forests Afforestation and reforestation.
Industry and manufacturing Energy conversion and energy efficiency
measures.
Process modification in order to lower emissions.
Change of feedstock in boilers.
Mining Coal bed methane recovery and reduction
of methane emissions.
Control of fires in mines.
Energy efficient systems.
Transport Introduction to alternate fuel.
Switch over to cleaner fuel.
Fuel efficiency measures.
Improvement of public transport.
Urban planning and traffic management.
Waste Landfill gas recovery and use.
Waste to energy conversion activities.
Composting from municipal organic waste.
28
2.8 Investment Analysis
The aim of an investment analysis is to evaluate whether the investment is
economically visible or not at any given time for different strategies. What is more,
Abu Dhabi government should know the profitability and estimated profit from the
investment of the CCS project. The most important point of the investment analysis is
to consider the concept time value of money which is the change in the amount of
money over a given time period.
2.8.1 Net present value (NPV)
The NPV is defined as the present value of the cash inflows and the present value of
the cash outflows. In other meaning, this method examines the cash flows of a project
over a given time period and all cash flow are discounted at the same fixed rate which
known as interest rate [46]. In order to judge the profitability and feasibility of any
project, the NPV must be evaluated to measure the project’s future net cash flows and
discounting these at the proper cost of the initial capital cost or net investment outlay,
at the project beginning period [47]. Therefore, NPV is play as indicator to measure
the benefit or investment value for any project as well as shows the project’s net
wealth [48].The study of (Pasqual et al., 2013) illustrate about the NPV method,
projects with positive net present values or values at least equal to zero are accepted
and the higher NPV for any type of project is desirable. Whereas, projects with
negative net present values are unacceptable.
29
In order to compute the net present value the formulation is presented in the following
equation:
Where:
NPV Net Present Value;
R Gross Revenue;
OPEX Operating Cost for (Capture, transport, injection)
CAPEX Capital Cost
i Hourly Inflation Rate
r Hourly rate discount
2.8.2 Cash Flow
The Cash Flow is described as the difference between total cash received and total
cash paid per time. In other words, cash flow shows all the expenses and revenues of
the single project for a given period of time for example one year, also it is defines
their present and future situation by net cash conditions. Cash flow is playing an
important part to evaluate the projects, equipment as well as investment alternatives.
The mathematical formulation of Cash Flow is given in equation 2:
Net Cash Flow = Annual Revenue – Annual Expenses (2)
2.8.3 Interest Rates
There are different terms between interest and interest rate. The different between the
initially invested money and the final accrued money is defined as interest and it is
formulated in equation (3). Whereas, the interest rate come from the description of the
interest as a percentage of the original amount per unit time as calculating in equation
4:
30
Interest = Total Amount Accumulated – Original investment (3)
(4)
Interest rate includes two different types of interest which are simple and compound
interest rate. The principle (Present Value) is used to calculate the simple interest and
the following equation 5 is used to calculate the simple interest:
Simple Interest= Principle * Number of Periods * Interest Rate (5)
The second type of interest is compound interest which known as interest for an
interest period that calculated on the principle in addition to the total amount of
interest accumulated in previous periods. In addition, the compound interest reflects
the effect of the time value of money on the interest too.
2.8.4 Break-Even Analysis
The benefit of break-even analysis is to estimate the profit or loss and to determine at
which point when revenue and cost will be equal. Also this point shows there will not
be profit and loss in break-even point. In this thesis, we will illustrates the break-even
point for some of accepted strategies under static and dynamic model.
2.9 Geometric Brownian Motion (GMB)
In this study we use stochastic process to model the uncertain variables to calculate
the real prices for carbon and international natural gas prices by using Geometric
Brownian Motion model for dynamic model only. The GMB considers the simplest
and popular specification in financial models [49].
31
In other words, this model is used stochastic process in financial economics theory
and use the real drift α in the equation to obtain the price at the future instant that
giving by the following equations:
The simulation is depending on the normally distribution N (0, 1) to obtain the
corresponding value of p. In addition, the volatility is defined as (one standard
deviation, in percent, over a one year period).Whereas, the drift is defined the rate at
which the average changes.
32
CHAPTER 3
Model Description
This chapter introduces detailed explanations of the static and dynamic model to
analyze feasible carbon subsidies to motivate carbon capture from power and
industrial productions and to evaluate various carbon capture and utilization (CCUS)
strategies for Abu Dhabi under changing international natural gas price, carbon price,
and domestic demand for natural gas. A System Dynamic (SD) model is used to carry
out and analyze economic and environmental assessments.
33
3. Methodology
3.1 Overview of System Dynamic Model
System Dynamic (SD) model is a rigorous modeling method and a tool for analysis of
long-term, complex feedback systems in managerial, organizational and
socioeconomic context. SD is a strategic model and assumes a high level of
aggregation of the objects being modeled. The model adopts holistic approach and a
powerful qualitative analysis tool enables us to understand the fundamental structure
of the system. The model structure consists of closed boundary and feedback loops
such as stock (levels), flows (rate) to understand the interaction between them. The
model contains a computer simulation model (mathematical model) which is a system
of coupled, nonlinear, first-order differential (or integral) equations. It is developed in
1950 by Professor Jay Forrester of the Massachusetts Institute of Technology and he
explained the philosophy and method of the approach in 1961 with the publication of
Industrial Dynamics.
3.2 Model description for Numerical Analysis by SD
In this section, we develop a numerical model (SD) in order to evaluate various
carbon capture and utilization (CCUS) strategies for Abu Dhabi under changing
international natural gas price, carbon price, and domestic demand for natural gas in
order to find the optimal strategies and decision rules in certain hours that generates
the maximize profit. All strategies are under incentive compatible subsidy regulation
for carbon capture from ESI and EMAL and calculate the Net Present Value (NPV) to
evaluate the profitability of investment in different projects. The reference case
supposes there is absence of policy to mitigate the CO2 emission by using CCS
34
technology. We examine cases in which CO2 gas can be captured, transported then
injected in depleted oil and gas fields (DOGF) onshore or injected in deep saline
aquifers (SA) offshore.
The time span for the simulated model is 20 years from 2011, 2030. Precisely, the
initial time is 0 hour to 175200 hours. The high level structure of the EMAL model is
shown in 4. The model comprises: (1) CO2 supply sectors (i.e. EMAL), (2) oil
production sector, (3) water sector, (4) electricity sector, (5) Storage sector in oil field
or saline aquifer. As shown in Fig4, flue gas drawn off from EMAL’s aluminum
production process enters the carbon capture plant and is captured with post
combustion technology using Aqueous amino acid salt (AAS) solvent. The captured
gas is then transported to be used for EOR or for Storage. If CO2 is used for EOR, the
oil company derives the substituted gas value. If CO2 is permanently stored in
underground geological formation, the storage operator derives revenues from carbon
credits. The capture plant consumes water for cooling and electricity for pumping
solvent and gas. More detail of carbon capture process of EMAL is explained in the
following section.
35
Figure 4 : High Level Model structure for EMAL
3.3 Process Description of CCS and Process Flow Diagram in EMAL
EMAL carbon capture is equipped with two flue gas coolers, two flue gas blowers,
two absorbers, desorber, heat exchangers and pumps and reclaimer for separation of
products from the solvent.
Figure 5 illustrates a simplified process flow diagram representing the flue gas from
gas turbines HRSGs (heat recovery steam generator ) 11 and 12 of EMAL Power
Plant’s enter the flue gas coolers with amount of gases (2268860 Kg/h, 2268860
Kg/h), respectively. During the flue gas cooling, the flue gas is in contact with cold
water in direct contact coolers (DCCs) in order to cool down the gas to reach a lower
absorption’s temperature around (42C°) before entering the Absorption. By doing this
process, the solubility of CO2 in the Aqueous amino acid salt (AAS) solvent is
36
increased and the volume flow rate can be considerably decreased to (2241255 Kg/h).
Therefore, the power needed for transport the flue gas will be reduced.
In order to wash out and remove the solid particles that might be appears in flue gas,
the quench water cooler pumps and quench water filters are used to withdraw the
water from the bottom of the flue gas coolers. The purposes of the quench water
coolers are used to cool the circulating quench water to 42 °C. Cooling tower loop
(sea water) is provided to remove the heat which comes from flue gas by cooling
water. As a result of cooling the flue gas, contained water vapors are condensed and
accumulated in the quench water. The total amount of water consume in two direct
contact coolers is 24558.19 T/h.
A Flue gas blower locates between DCCs and absorption column. This is required to
overcome the pressure drop in different equipments such as flue gas ducts including
dampers, bends, the flue gas coolers and the absorbers. As stated earlier, the flue gas
volume is reduced in the DCCs. As a consequence, energy demand required is very
low during the blowers operation.
37
Figure 5: Flue Gas cooling and flue gas blowing systems [50]
Figure 6 presents flue gas (GT 11 and gt12) enter the bottom of the absorption
columns and treated with a regenerated or lean washing agent (Cold Solvent) which is
directed downwards from the top of the absorber column to capture the CO2 from the
flue gas. Aqueous amino acid salt (AAS) solvent was selected to be operated in the
capture plant of EMAL-Masdar carbon capture project that relates to an AAS
concentration of 37 %wt in water. Also the solvent has the features of low absorption
enthalpy and near-zero vapor pressure.
38
Figure 6: Flue Gas cooling and flue gas blowing systems Absorption and Solvent
Loop system [50]
Heat is produced due to the reactions between CO2 with capture solvent. This heat
leads to the formation of a temperature profile in the absorber. Additionally, the cold
solvent is heated at its directed downwards due to the heat of reaction and finally
cooled at the bottom of the column by heat exchange with the cold flue gas. The
treated gas (2120398 Kg/h) leaves the absorber column through a fitted absorber stack
at the top, while CO2 is captured in the solvent during the absorption process. In the
absorber sumps the rich solvent saturated with CO2 (5599969 Kg/h) is collected and
directed to the lean/rich exchangers. In the solvent loop system, The rich solvent
(contains high amount of CO2) is collected at the bottom of the absorber section and
pumped through a lean/rich exchanger to heated up before being fed into the
desorption column.
39
The rich solvent pump is used to transport the stream in each absorption line at 50%
capacity to the rich solvent filters. The function of filter is to remove particulate
materials that accumulate in the solvent. The two rich solvent streams from both
absorber columns are merged after the passing the rich solvent filters. This merged
rich solvent stream is split into a major part of rich solvent which reaches the lean/rich
solvent heat exchanger and a minor part of rich solvent which is straight directed to
the desorber top in order to condense vapors in the desorber. As a consequences, the
heat is recovered which can be possible removed from the system by using cooling
water. It is require around 7443.395 T/h of cold water to remove the heat.
The major stream cold rich solvent (671998 Kg/h) is heated up by heat exchange with
hot lean solvent (10527962 Kg/h) in the lean/rich solvent exchanger afterwards it is
routed to the desorber as hot rich solvent at a lower position. Before entering desorber
column, the solvent passes through a control valve to maintain a certain pressure in
order to not release the CO2 from heated rich solvent and to maintain a one-phase
flow in the lean/rich solvent heat exchanger.
The rich solvent flows through the desorber downwards in counter-current to the
vapor consisting of H2O and CO2. The desorber is connected with two reboilers
which provide the heat necessary to strip out the CO2 from the chemical solvent to
leave the desorber at the top (268077 Kg/h) as shown in Figure 4. The total amount
of energy is required in the EMAL capture plant to pump the cold and hot rich
solvent, cold water is around 50 Megawatt per hour.
40
Figure 7: Desorber system [50]
Steam is condensed in the two desorbers condenser so the remaining CO2 can be
further treated compressed or liquefied. Also to adjust the desorber pressure, a
pressure control valve is installed in the CO2 product stream leaving the condensers.
In the bottom of the desorption column the regenerated washing agent (lean solvent)
leaves and is used for heating up the saturated solvent.
The lean solvent is split into two streams serving the two absorption lines A and B
(5479112 Kg/h, 5479112 Kg/h), respectively. Both of stream solvents are equal
during normal operations and the split based on the factor that controlled by the
individual load of the two absorption lines. Before entering back into the absorber
column the lean solvent is pumped by the lean/rich exchanger to the lean solvent
cooler where the solvent is cooled down and can be reused for capturing CO2 in the
column.
41
A small slip stream of solvent is passed through reclaimer unit to remove degradation
products prior to returning to the solvent loop upstream the lean solvent coolers to use
it in capturing of CO2 in absorber column. In the EMAL-MASDAR Carbon Capture
project to meet the CO2 pipeline specification in terms of pressure and water content
the CO2 gas is routed through various units (compressor, dehydration and the O2
removal) and the total amount of energy is needed around 12.155 Megawatt per hour
during these units. Once CO2 is captured (238863 Kg/h), it is transported by pipelines
network to selected oil reservoirs for enhance oil recovery (EOR) processes.
In more details through (compressor, dehydration and the O2 removal) process, the
gas of CO2 goes through a seven-stage integrally geared CO2 compressor with an
additional single-shaft stage after the leaves of the desorber condensers. After the
third compression stage the CO2 is extracted and routed to an oxygen removal unit. In
addition of this unit, hydrogen is catalytically converted with oxygen to water
whereas the oxygen contained in the product is reduced to a minimum. The CO2 is
routed to a dehydration unit before reintroducing it upstream of the forth compression
stage. By doing this process, the water is removed by adsorption on silica gel. Each
compression stage increases CO2 product pressure by a factor of approx. 2. The heat
is removed during compression process by installing intercoolers between most of the
stages. Thus, water condenses appears during cooling at the different pressure levels.
In order to remove this excess water each interstage cooler is provided by a gas/liquid
separator.
A reclaimer unit is used for regenerating the chemical solvent (53393 Kg/h) and
remove products in the flue gas such as SOx (major impurity), NOx and oxygen.
Without using of a reclaimer, a fresh AAS substance (1625 Kg/h) will be fully
42
replaces instead of degraded solvent as a result a high cost will appears to purchase a
fresh substance of AAS and disposal of used solvent.
A similar model for ESI is developed to characterize the EOR-CCS process for steel
production. It is notable that electricity consumption is much less in ESI than EMAL
given that CO2 feed stream in steel production contains approximately 90% CO2. The
flue gas of CO2 is transported from the two industries by pipeline for EOR purposes
or Store the gas in geological formation to achieve carbon credit.
Figure 8: High Level Model Structure for ESI
3.4 Process Description of CCS and Process Flow Diagram in ESI
Figure 9: Compression System [50]

43
The stream from ESI is transported in series to the first stage suction Scrubber. The
gas continues to the first stage of the integrally geared centrifugal compressor after
the free liquids fall out of the gas in the scrubber. The compressor includes six stages
that linked by motor. After leaving the compressor the gas has a higher pressure and
temperature. In the first stage air cooler, the gas is cooled to reach 58°C during the
summer time. Therefore, free water appears in the gas stream during cooling. Two
phase stream of water and gas exits the first stage air cooler and directs to the second
stage suction scrubber. The process is identical for all stages except the 6th stage is
different because of air cooler outlet is further cold in the gas-gas exchanger.
Through gas to gas exchanger, the CO2 is expanded across JT valve where more
condensation exists. Afterwards, condensed water will be removed from the stream by
knockout drum. Water that is condensed is cascaded back to the first stage
suction scrubber where dissolved CO2 and H 2 S flash out of the water. Water will be
pumped to the sanitary sewer in the first stage suction scrubber via a flash pipe that
vents entrained gasses. At 50 barg, the gas leaves the sixth stage air cooler and sent to
the gas-gas exchanger. The function of exchanger is to cool the gas from 56°C to
29°C by JT valve expansion. After exits the gas-gas exchanger, the CO2 proceeds to
the JT valve lead the pressure to reduce to 36 barg and drop the temperature roughly
to 17°C. This cooling cause free water to appear and further CO2 dehydration takes
place.
44
Figure 10: Dehydration System [50]
The two phase gas and water stream flows to a scrubber where liquid is dropped out
of the gas stream. The gas leaves the top of the scrubber and is directed to the gas-gas
exchanger I order to warm up to reach 46ºC. The gas is become dry and has only 40
lbs of H2O per MMSCF (0.675 g H 2 O/Nm3). Additionally, the CO2 content down
to 7 lbs H2O per MMSCF (0.1183 g H 2 O/Nm3) by using a tie-in which is not
obligatory in dehydration system. The gas-gas exchanger is used in order to minimize
the pressure drop across the JT vale and the power need for compression. After
dehydration, the dry gas is compressed to pipeline pressure. First step, it will go into
the first stage of the HP CO2 compressor and then be cooled in the seventh stage air
cooler. At this point no free liquid will be formed when the gas is cooled. Therefore,
the gas is dry and the pressure is above the critical pressure so the gas is compressed
and cooled a final time at 190 barg and 58°C. Cooling water in ESI is supplied by the
packaged cooling tower and used during start-up to shorten the time to achieve
specification product. The gas and equipment are warm during the start-up and cool
down required for dehydration may stake an extended period of time.
3.5 Data collection and Assumptions
An extensive literature review was performed to assess the performance of the
parameters for two industries sectors in the static and dynamic model:
Table 8: Parameters of the model
45
Parameters of the model Value Unit Source
EMAL Production Capacity 127.2 (tonne/hour Emal environmental report
)
Operating Hours for aluminum 7500 Hour Masdar Carbon Unit
production
Annual production capacity 945000 Tonne Emirates Aluminum Project Report
for phase 1
the ratio of CO2 to the flue gas 0.052566 Percentage Masdar Carbon Unit
at captured rate (EMAL)
Per unit Electricity Subsidy 0.04 USD/Kwh Presentation of the future outlook of
desalination plant in the Gulf
Per unit Electricity 0.208 KWh/Kg Masdar Carbon Unit
Consumption for Emal
Capture
Per unit Water Subsidy 1.88 USD/tonne Presentation of the future outlook of
desalination plant in the Gulf
Per Unit Water Consumption 0.01341 tonne/Kg Masdar Carbon Unit
for Emal CO2 Capture
Per unit Electricity 0.0509 KWh/Kg Masdar Carbon Unit
Consumption for Emal
Compress
Probability of carbon crediting 0.5 Assumption
Oil Production rate with CO2 0.005 Barrel/Kg Full report of statistical Review of
for EOR world energy Bp Global
Oil Production Rate with Gas 0.050872 Barrel/m3 Full report of statistical Review of
for EOR world energy Bp Global
Production Capacity 7.27803e - Full report of statistical Review of
Increasing Rate -005 world energy Bp Global
Target Production Rate at 145833 Barrel/Hou Oil review middle east (Monday, 17
2017 r December 2012)
Associated Gas Production 49.0227 m3/Barrel Full report of statistical Review of
Rate per Oil Production world energy Bp Global
Imported Gas from Existing 163242 m3/hour Full report of statistical Review of
Contract world energy Bp Global
Steel Production Capacity 277.778 tonne/hour Emirates Steel industry
Operating Hours for Steel 7920 Hours Masdar Carbon Unit
production
Annual Steel production 2200000 Tonne Emirates Steel industry
capacity for phase 1
Per Unit Electricity 0.229 KWh/Kg Paper: Economic Feasibility of CO
Consumption for Steel CO2 2 Capture from Oxy-fuel Power
Compress Plants Considering Enhanced Oil
Recovery Revenues (Z. Khorshidi)
The ratio of CO2 to the flue 0.963 Percentage Masdar Carbon Unit
gas at captured rate (EMAL)
Duration of project time 0 to20 Year Assumption
Inflation Rate (annual) 2.26e- - Assumption
006
Interest Rate (annual) 8.78555e - Assumption
-006
46
Table 9 shows the operating expenses for Ons DOGF Leg and Offs.SA NoLeg cases.
The cost components of operating include the operations and maintenance cost for
capturing the CO2 and for transport and injection as well as capital cost.
Table 9: Operating expenses of the model
Parameters of the model Value Unit Source
Opex For EMAL Capture 52.4 USD/tonne Masdar Carbon Unit

Opex for ESI Capture 22 USD/tonne Masdar Carbon Unit
Opex For EMAL Transport 4500 USD/mile/ Masdar Carbon Unit
Year
Opex For ESI Transport 22000 USD/mile/ Masdar Carbon Unit
Year
Distance for EMAL 120 Miles Masdar Carbon Unit
Distance for ESI 27 Miles Masdar Carbon Unit
OPEX for Injection Ons 0.77 USD/tonne Cost of storage report (Zero
DOGF Leg emission Platform ieaghg)
OPEX for MMV Ons DOGF 1.42 USD/tonne Cost of storage report (Zero
Leg emission Platform ieaghg)
OPEX for Injection offs 2.9 USD/tonne Cost of storage report (Zero
DOGF Leg emission Platform ieaghg)
OPEX for MMV offs DOGF 2.32 USD/tonne Cost of storage report (Zero
Leg emission Platform ieaghg)
OPEX for Injection offs SA 3.42 USD/tonne Cost of storage report (Zero
emission Platform ieaghg)
OPEX for MMV offs SA 0.92 USD/tonne Cost of storage report (Zero
emission Platform ieaghg)
CAPEX Cost for Ons.DOGF 1265094 USD Cost of storage report (Zero
Leg 000 emission Platform ieaghg)
CAPEX Cost for Offs.SA 1297880 USD Cost of storage report (Zero
NoLeg 000 emission Platform ieaghg)
3.6 Storage site characterizations Data
In this thesis, parameters for oil and gas field and aquifer were based on the data
provided from the paper of life cycle assessment of selected technologies for CO2
transport and sequestration. As stated earlier, the fluid is transported and injected in
supercritical state at a minimum depth of 800m to store the CO2 to be in high density
47
as shown in table 10. While, the pressure condition of the reservoir ranges between
200 bar and 1000 bar as well as a assumed gas turbine efficiency is 85 %.
The following table shows the parameters of aquifer and gas oil are selected in this
study to calculate the electricity requirement for the injection of CO2, the energy
consumption is depend on the injection rate as well as pressure difference.
Table 10: Parameters of aquifer and gas oil [20]
Parameter Unit Aquifer Gas field

Depth m 800 2500
Surface pressure of CO2 Bar 80 80
at the well head
Hydrostatic pressure in Bar 78.4 171.5
the reservoir
Pressure required at Bar 108.4 201.5
bottom hole
Δp required for injection Bar 28.4 121.5
efficiency η - 85% 85%
volume flux at ρ = 277.9 m3/s 0.45 0.45
kg/m
Power MW 1.5 6.4
The electricity needed for the injection of CO2 in aquifer and gas field ( ) is given
by the equation 1 as following:
(7) [20]
Where:
is the electricity needed for the injection of CO2 in aquifer or in oil and gas field
(Kwh/kg)
is Pressure required for injection (bar)
is injection rate of CO2 (Kg/hour)
48
is a assumed gas turbine efficiency
Figure 12 presents the breakdown of cost components for medium scenarios of two
cases. The Pre-FID includes cost for modeling, seismic survey, and injection testing,
new exploration well and permitting. What is more, The Pre-FID cost for Offs.SA
NoLeg is greater than DOGE due to SA cases requires more investigate on the site to
verify their suitability for storage. In general, offshore is more costly in operation, due
to the condition of the environment in term of construction and drilling as well as
operations [51].
Breakdown of Cost components-medium scenarios for

two cases
14
12
€/ Tonne CO2 stored
10
8
6
4
2
0
Offs.SA.NoLeg Ons.DOGF Leg
Pre-FID 5.9 0.3
Structure 1 0
Injection wells 3.1 0.3
MMV 0.7 1.1
Close down 1.1 1
Figure 11: Breakdown of cost components- medium scenarios for two cases [51]
3.7 Equations of the Model for analysis
In this section includes the most important equations of this model.
Flue Gas per Aluminum Production
49
Based on raw flow gases data from the Masdar Carbon Unit of Masdar company, the
following equation can be used to calculate Flue Gas per Aluminum Production:
Where:
is Flue Gas per Aluminum Production (Kg/tonne)
is stream of raw flue gas coming from the two gas turbines of the EMAL Power Plant
(kg/hour)
is Aluminum production (tonne/hour)
The ratio of CO2 mass flow captured during EMAL process
The ratio of CO2 mass flow captured through captured process of EMAL power plant is given
by:
Where:
is the ratio of CO2 to the flue gas at captured rate
is the stream of Carbon dioxide gas from the two turbines of EMAL Power Plant
(kg/hour)
is the stream of raw flue gas from the two turbines of EMAL Power Plant (kg/hour)
Captured CO2 from EMAL
To calculate Captured CO2 from EMAL, the following equation is used:
Where:
is Captured CO2 from EMAL plant (kg/hour)
is the ratio of CO2 to the flue gas at captured rate
is Flue Gas per Aluminum Production
Compressed of the CO2
50
The total amount of CO2 that must be compressed is equal to the captured CO2 and is
calculated by following equation:
Where:
is the amount of captured CO2 that must be compressed (kg/hour)
is Captured CO2 from EMAL plant (kg/hour)
Flue Gas per Steel Production
Based on raw flow gases data from the Masdar Carbon Unit of Masdar company, the
following equation can be used to calculate Flue Gas per steel Production:
Where:
is Flue Gas per Aluminum Production (Kg/tonne)
is stream of raw flue gas coming from direct reduction plant source of ESI (kg/hour)
is Aluminum production in (tonne/hour)
The ratio of CO2 mass flow captured during ESI process
The ratio of CO2 mass flow captured through captured process of ESI power plant is given
by:
Where:
is the ratio of CO2 to the flue gas at compressed rate
is the stream of Carbon dioxide gas from from direct reduction plant source (kg/hour)
is the stream of raw flue gas from direct reduction plant source (kg/hour)
Compressed CO2 from ESI
To calculate Compressed CO2 from ESI, the following equation is used:
51
Where:
is Compressed CO2 from ESI plant (kg/hour)
is the ratio of CO2 to the flue gas at compreesed rate
is Flue Gas per Steel Production (Kg/tonne)
is the percentage of capture the CO2
Calculation For CO2 transportaion
After compressing process the CO2 gas is transported by pipeline to their respective
destinations. The total amount of CO2 that must be transported is equal to the compressed
CO2 from ESI plant and is calculated by following equation:
Where:
is the amount of transported gas from ESI plant (kg/hour)
is Compressed CO2 from ESI plant (kg/hour)
After determining the amount of CO2 that can be transported either for Enhance Oil
recovery (EOR) or for sequester in saline aquifers, the total amount is computed using the
following equation for EOR:
Where:
is the total amount of CO2 transported from EMAL and ESI plant for EOR purposes
(kg/hour)
is the amount of transported gas from EMAL plant (kg/hour)
52
is the percentage of CO2 is used for EOR
Transport CO2 for saline aquifers:
The amount of CO2 that can be transported for sequestering in saline aquifers:
Where:
is the total amount of CO2 transported from EMAL and ESI plant (kg/hour)
is the amount of transported gas from EMAL plant (kg/hour)
Calculation For Carbon crediting cash
Carbon crediting cash flow is found by using the following equation:
Where:
is carbon crediting cash flow (USD/hour)
is the price of carbon (USD/kg)
is the probability of Carbon Crediting
Calculation For substitute ratio of CO2 and Enhance Oil recovery
Based on the assumption that are taken from Soltanieh et al (2009) , substitute ratio of CO2
for Gas in EOR is given by following equation:
Where:
is substitute ratio of CO2 for Gas in EOR (m3/Kg)
is oil Production Rate with Gas for EOR (Barrel/m3)
is oil production rate with CO2 for EORin (Barrel/Kg)
53
Calculation For Net Present Value Rate
Net present value rate is computed using the following equation:
)^( )) (8)
Where:
is Net present value rate (USD/Hour)
is the total cost of Operational expenditure (USD/Hour)
T is timeframe between 0 to 87600 (hour)
is the Time Normalization Variable (hour)
is the hourly inflation rate (Dimensionless)
is Hourly rate discount (Dimensionless)
54
CHAPTER 4
Static Model (Analysis and Discussion)
In this chapter we present different analysis and a range of simulation results
for different scenarios for the CCS strategy cases when the model is static, the
analysis starts with benchmark scenario when there is no capture of carbon from the
sources of EMAL and ESI industries. Then, the model was run with different
strategies in order to evaluate each strategy at any given time. All cases were under
static conditions when the price of natural gas and carbon prices are fixed, but it
varies with time.
55
4.1 Analysis and variables description
We first identify the incentive compatible carbon price regulation for ESI and EMAL
when the captured carbon can be used for EOR or sequestrated in permanent storage.
We then discuss the spillover effects of carbon capture from ESI and EMAL on the
economy of Abu Dhabi. A numerical analysis can then be performed to estimate the
macroeconomic effects under incentive compatible carbon capture regulation in the
next section. The key variables are defined as follows:
Pe: the feasible carbon price for CO2 from ESI and EMAL under an efficient market
where internal gas price and international carbon price reflect the true long term
environmental-economic value of gas and carbon.
P: the incentive compatible carbon price for CO2 from ESI and EMAL under an
inefficient market where internal gas price and international carbon price do not
reflect the true long term environmental-economic value of gas and carbon.
Vg: the per unit value of CO2 for EOR. The value is determined by the substituted
gas value by CO2 for EOR.
Vc: the per unit value of CO2 for storage. The value is determined by international
carbon price when CCS is included in international regulation for climate change
mitigation.
C: the per unit cost of carbon capture. This is determined by industrial process as
well as carbon capture technology employed.
S: the per unit carbon subsidy provided by the government to the sellers of CO2 (e.g.
ESI and EMAL).
56
Note that Pe, P, Vg, and Vc are all buying prices. While P, and S are decision
variable, Pe is a function of exogenous variables Vg, Vc, and C since there is no
market failure to be fixed in an efficient market. Nevertheless, the trading pattern in
the efficient market provides a benchmark for us to identify the regulation needed in
an inefficient market. Following the business as usual scenario of carbon capture at
ESI and EMAL, we make the following assumptions:
Productions of primary goods (e.g. aluminum and steel) are fixed so there is no
interaction between carbon price and primary good production.
Carbon market is competitive so CO2 is sold to the buyer who offers higher carbon
price.
In the inefficient market, the objective of regulation is to promote CO2 capture for
either EOR or storage.
Any one of the carbon buyers can consume all available CO2 when carbon value is
high than cost.
Assume there exists distortionary cost associated with public funds so minimum
subsidy is desired.
It is aware that the assumption (3) may result in inefficient trade. Nevertheless, it is
imposed as a practical assumption to fit the context. Define an incentive compatible
carbon regulation regime by one where the CO2 producer is willing to pay C to
capture CO2, we can identify Pe and P as follows:
When min (Vg, Vc) > C:
Pe = P = min (Vg, Vc) if CO2 buyers have greater bargaining power.
57
Pe = P = max (Vg, Vc) if CO2 producers have greater bargaining power.
When max (Vg, Vc) > C > min (Vg, Vc):
Pe = P = max (Vg, Vc) if CO2 buyers have greater bargaining power.
Pe = P = C if CO2 producers have greater bargaining power.
When max (Vg, Vc) < C:
Efficient market: CO2 capture is not socially optimal so there is no trade.
Inefficient market: P = C, S = C - max (Vg, Vc)
There are two rationales for the government to promote CCS in our context. The first
rationale is to increase domestic gas supply through releasing gas originally used for
EOR. The second rationale is to derive carbon credits if carbon price is competitive.
The spillover effects of CCS with EOR can be complex. At one hand there exists
energy penalty associated with carbon capture. On the other hand the substitute rate of
CO2 for gas in EOR has to be sufficiently high to make Carbon capture economically
feasible. The aggregate effects will be identified with a numerical analysis.
4.2 Data Collection and assumption in static model.

Figure 12 illustrates the carbon price paths in fixed and flexible prices in the treasury
analysis for (26280 – 87600) Hours. But in this analysis, we depend on flexible prices
as parameters in our model and depend on historical data to assume the price of
carbon for the following hours (96360-175200) see table 3.
58
Figure 12: Carbon Price paths [52]
Table 11: Data Carbon Price USD/Tonne

Hours Value Source
96360 48.72 Assumption increase 5%

59
Table 12: Data of International Gas Price USD/M3
Hours Value Source
8760 0.353811 References (6-10)USD/Mmbtu

60
Table 13: Data of Natural Gas demand for domestic consumption USD/M3
Hours Value Source
8760 6742544.521 [53]

17520 6939660.959 [53]
26280 7184931.507 [53]
35040 7687876.712 Assumption
43800 8226028.082 Assumption
52560 8801850.048 Assumption
61320 10102739.73 [53]
70080 10278538.81 Assumption
78840 10582041.82 Assumption
61
Table 14: Data of Import Natural Gas from Qatar USD/M3
Hours Value Source
8760 1969178.082 [53]

17520 1969178.082 [53]
26280 1969178.082 [53]
35040 1969178.082 [53]
43800 2054794.521 [53]
52560 2092465.753 [53]
61320 2124429.224 [53]
70080 2124429.224 [53]
78840 2124429.224 [53]
87600 2124429.224 [53]
4.3 Analysis Results and discussions
We define 3 decision variables to identify the economic value added (EVA) of
CCS with EOR under incentive compatible subsidy regulation for CO2 capture from
ESI and EMAL. The variables are respectively: Percentage of capacity for production;
Percentage of Flue gas to be treated with carbon capture; and percentage of CO2 to be
used for EOR. There are 2 variables representing ESI and EMAL for each of the first
2 variables. The last variable is introduced after we found that the total CO2 captured
from full capacity of ESI and EMAL will mostly be used in EOR given the estimated
CO2-gas substitution rate for EOR, expected gas price, and expected carbon price. It
is further found that the substituted gas for EOR only accounts for 0.1% of total
62
domestic gas demand so the macroeconomic impact is limited. As a result in the
analysis we allow CO2 to be used for CCS to evaluate the environmental effects of
carbon capture.
In the below analysis we calculated the Net CCS Cash flow which is determined by
realizing the gas value from EOR + realized CO2 credit value from storage –
electricity and water cost. All costs are calculated with net present value.
4.3.1 Analysis 1: Effects of production capacity expansion
Scenarios considered for analysis 1 are shown in Table 15. This analysis shed the
light on Percentage of capacity for production. There is no carbon capture in the
benchmark scenario then we run the model for different strategies. This analysis was
for onshore depleted oil and gas fields for existing (legacy) wells and offshore for
Saline aquifer. For example, S3-BAU-EOR-SA (scenario3-business as usual and 50
percent of CO2 is supposed to be injected for enhance oil recovery and the other 50
percent of CO2 is supposed to be injected for Deep saline aquifers (SA) offshore.
Percentage of CO2 to be used for EOR is ranged from (0 -1) percent.
63
Table 15: Scenarios in Analysis 1
S1- S2- S3- S4- S5- S6- S7- S8- S9- S10-
Scenarios BM- BAU- BAU- BAU- HS- HS- HS- HA- HA- HA-
without SA EOR- EOR SA EOR- SA EOR- EOR
CC EOR
SA SA SA
Percentage of Capacity for 1 1 1 1 1 1 1 1.5 1.5 1.5

Production EMAL
Percentage of Capacity for 1 1 1 1 1.5 1.5 1.5 1 1 1
Production ESI
Percentage of Flue Gas to be 0 1 1 1 1 1 1 1 1 1
treated with Carbon Capture
EMAL
Percentage of Flue Gas to be 0 1 1 1 1 1 1 1 1 1
treated with Carbon Capture ESI
Percentage of CO2 to be used 0 0 0.5 1 0 0.5 1 0 0.5 1
for EOR
The resulting values of energy required for the injection of CO2 in onshore depleted
oil and gas fields for legacy wells and offshore for Saline aquifer are illustrated in the
following table by using equation 1 as stated earlier in chapter 3. In this thesis, the
energy is depending on the different flow rate of CO2 that assumed to be transported
and then injected for EOR or in SA. In addition, energy is different due to others
characterization of the oil well and storage site such as pressure difference and depth.
Table 16: Energy required for the injection of the different flow rate of CO2 in
Ons.DOFG and Offs.SA for scenarios in Analysis 1.
Flow Rate of CO2 Flow Rate of CO2 Energy Energy

Scenarios to the storage to the EOR (Kg/h) Consumption for Consumption for
(Kg/h) storage (kWh/Kg) EOR (kWh/Kg)
S1-BM-without CC 0 0 0 0
S2-BAU- SA 348514 0 0.004314115 0
S3-BAU-EOR- SA 174257 174257 0.00862823 0.018456512
S4-BAU-EOR 0 348514 0 0.018456512
371066 0 0.004051919 0
S5-HS-SA
185533 185533 0.008103838 0.034669589
S6-HS-EOR-SA
0 371066 0 0.017334795
S7-HS-EOR
64
S8-HS-SA 500219 0 0.003005742 0
S9-HA-EOR-SA 250109 250109 0.006011497 0.025718199
S10-HA-EOR 0 500219 0 0.012859070
Figure 13: Results of Net CCS Cash Flow for Analysis 1
S10-HA-EOR (Scenario10-High Aluminum production and used for enhance
oil recovery) has the highest Net CCS Cash Flow over 20 years due to the highest
amount of CO2 is captured and use it for enhance oil recovery purposes that will
affect the mobility of the oil and allow to extract more oil from oil field. Whereas, S7-
HS-EOR (scenario7-High steel production and used for enhance oil recovery) shows
the second highest Net CCS Cash Flow. This is due to the amount of flue gas that
obtains from steel industry that has high percent of CO2 around 90% from the total
flue gas. What is more, In ESI plant there is no water consumption during the
compress and dehydrates of CO2. Benchmark scenario without carbon capture has
65
zero Net CCS Cash Flow since no capture process happen in this case. S4-BAU-EOR
(scenario4-Business as usual and used for enhance oil recovery) also is considered as
third highest Net CCS Cash Flow. I conclude that capture CO2 and use it for EOR has
a better impact on the economy of Abu Dhabi rather than storage it in geological
formation.
Project NPV alternatives (over a 20-year period)

0
-0.5
-1
USD (Billion)
-1.5
-2
-2.5
-3
-3.5
Figure 14: Results of Net Present Value for Analysis 1
The NPV analysis results are summarized in the figure 13 in detail of each scenario
over the 175200 hours. A major assumption made to calculate the NPV is to
frame the analysis as the difference between the cash flows associated with a natural
gas and carbon credit revenues and the cash flow associated with the cost of
consumption of energy and water in capture plant as well as injection of CO2 for
EOR purposes and storage site.
The different scenarios show present value of costs exceeds present value of benefits
and all NPV are negative. The drop in the NPV from the benchmark scenario is (-2.5
B) to different cases. For example, S10-HA-EOR (scenario10-High Aluminium
production and used for enhance oil recovery) has NPV which is (- 2.3 B). This is
due to the CCS cost that compromises the capital and operating costs associated with
66
capturing, transport and inject of CO2 and also cost of energy penalty and water
consumption in order to separate CO2 from flue gases. In conclusion, all the strategies
under analysis 1 show the projects are economically infeasible due to the investments
expected NPV is negative.
4.3.2 Analysis 2: Effects of Flue Gas Treatment Percentage
In this analysis, the percentage of Flue Gas to be treated with Carbon Capture in
EMAL and ESI plants are different among scenarios. This analysis is for onshore
depleted oil and gas fields for existing (legacy) wells when the price of CO2 is fixed
and varies over time. Scenarios considered for analysis 2 are shown in Table 17.

S1- S2- S3- S4- S5- S6- S7- S8- S9- S10-
Scenarios BM- BAU- BAU- BAU- HS- HS- HS- HA- HA- HA-
without CC CC CC CC CC CC CC CC
CC CC
Percentage of Capacity for 1 1 1 1 1 1 1 1.5 1.5 1.5

Production EMAL
Percentage of Capacity for 1 1 1 1 1.5 1.5 1.5 1 1 1
Production ESI
Percentage of Flue Gas to 0 0.5 0.7 1 0.5 0.7 1 0.5 0.7 1
be treated with Carbon
Capture EMAL
Percentage of Flue Gas to 0 0.5 0.7 1 0.5 0.7 1 0.5 0.7 1
be treated with Carbon
Capture ESI
Percentage of CO2 to be 0 1 1 1 1 1 1 1 1 1
used for EOR
The resulting values of energy required for the injection of CO2 in onshore depleted
oil and gas fields for legacy wells are illustrated in the table 18. In this thesis, the
energy is depending on the different flow rate of CO2 that assumed to be transport
and then inject for EOR for different cases.
67
Table 18: Energy required for the injection of the different flow rate of CO2 in
Ons.DOFG for scenarios in Analysis 2
Flow Rate of CO2 Energy
Scenarios to the EOR (Kg/h) Consumption for
EOR (kWh/Kg)
0 0
S1-BM-without CC
174257 0.036913025
S2-BAU- CC
243960 0.026366425
S3-BAU-CC
348514 0.018456512
S4-BAU-CC
185533 0.034669589
S5-HS-CC
259746 0.024764012
S6-HS-CC
371066 0.017334795
S7-HS-CC
250109 0.025718199
S8-HS-CC
350153 0.018370121
S9-HA-CC
500219 0.012859074
S10-HA-CC

0.00
-0.20
-0.40
-0.60
USD (Billion)
Scenarios
-0.80
-1.00
-1.20
-1.40
The NPV analysis results are summarized in the figure 15 in detail for each scenario
over the 172500 hours. A major assumption made to calculate the NPV is to
frame the analysis as the difference between the cash flows associated with a natural
68
gas and carbon credit revenues and the cash flow associated with the cost of
consumption of energy and water in capture plant and injection of CO2 for EOR
purposes and storage site.
The drop in the NPV from the benchmark scenario is (-1.276 B) to different cases.
For example, S7-HS-EOR (scenario7-High steel production and used for enhance oil
recovery) has NPV which is (- 1.2 B). This is due to the same reasons of analysis 1
when CCS cost that compromises the capital and operating costs associated with
capturing, transport and inject of CO2 and also cost of energy penalty and water
consumption in order to separate CO2 from flue gases. In conclusion, for all
strategies, projects are infeasible in term of finance according to NPV index.
4.3.3 Analysis 3: Effect of CO2 source with production Capacity
In this analysis illustrates different scenarios under different decisions when capture
the CO2 only from one source such as EMAL or ESI. Also it is shows capture the
CO2 from the different sources at the same time under different percentage of
capacity for production. Scenarios considered for analysis 3 are shown in Table 19.
69
Scenarios S1-ESI- S2-EMAL- S3-ESI- S4-ESI-HS- S5-EMAL- S6-ESI-

CCS-EOR CCS-EOR EMAL-CCS- CCS-EOR HA-CCS- EMAL-
EOR EOR CCS-EOR
Percentage of 1 1 1 0 1.5 1.5

Capacity for
Production EMAL
Percentage of 1 0 1 1.5 0 1.5
Capacity for
Production ESI
Percentage of Flue 0 1 1 1 1 1
Gas to be treated
with Carbon
Capture EMAL
Percentage of Flue 0 1 1 1 1 1
Gas to be treated
with Carbon
Capture ESI
Percentage of 0 1 1 1 1 1
CO2 to be used
for EOR

200,000,000.00
0.00
-200,000,000.00
-400,000,000.00
USD
Scenarios
-600,000,000.00
-800,000,000.00
-1,000,000,000.00
-1,200,000,000.00
In this analysis, S4-HS-EOR (scenario4-High steel production and used for enhance
oil recovery) shows the highest NPV among all scenarios (USD 3.837 M). This is due
70
to high amount of flue gas that obtains from steel industry with high percent of CO2
around 90% from the total flue gas.
4.4 Environmental Impact:
Figure 17: Total emission and CO2 Emission Reduction for analysis 3
In the figure above shows total emission and CO2 emission reduction for analysis 3 of
different scenarios. It is show the aluminum industry emits a lot of emission to the
atmosphere and by using CO2 capture technology will capture the CO2 and reduce
the total of flue gases that released to the atmosphere. But, if we see the figure below
will show the total emission of flue gas from steel industry that contain 90% of CO2
and by compressing and dehydration operations system will reduce the total flue gases
that vented to the air.
71
Figure 18: Total emission and CO2 Emission Reduction for ESI industry
4.5 Conclusion
We conclude that strategy of capture the CO2 from steel industry is economically
feasible due to the highest NPV among all scenarios under forecasting of international
gas and carbon prices due to the low compress cost of CO2 from ESI comparing to
the capture and compress of CO2 gas from EMAL. Also the flue gas from ESI
contains 90% of CO2 gas and there is no consumption of water for cooling purposes
this will help to compress the CO2 with low cost and has a positive impact towards
the environment.
72
CHAPTER 5
Dynamic Model (Analysis and Discussions)
In this chapter we illustrates different decisions rules and a range of simulation results
for different scenarios for the CCS strategy cases when the model is dynamic, the
analysis starts with benchmark scenario when there is no capture of carbon from the
sources of EMAL and ESI industries. Then, the model was run with different
strategies in order to estimate the feasibility of each strategy and find the optimal
strategy among all strategies so Abu Dhabi can take the decision under changing
international natural gas price, carbon price, and domestic demand for natural gas.
5.1 Analysis and variables description
In this section, we built a numerical model (SD) for the dynamic model to evaluate
different strategies at any given point to test the feasibility of projects with the
maximum NPV.As stated in the literature review above, in this model we use
stochastic process to model the uncertain variables to calculate the real prices for
carbon and international natural gas prices by using Geometric Brownian Motion
model. This model is used stochastic process in financial economics theory and use
the real drift α in the equation to obtain the price at the future instant that giving by
the following equation 9:
73
Also under dynamic model we define the same 3 decision variables for static model to
identify the economic value added (EVA) of CCS with EOR under incentive
compatible subsidy regulation for CO2 capture from ESI and EMAL. The variables
are respectively: Percentage of capacity for production; Percentage of Flue gas to be
treated with carbon capture; and percentage of CO2 to be used for EOR. There are 2
variables representing ESI and EMAL for each of the first 2 variables. The last
variable is introduced after we found that the total CO2 captured from full capacity of
ESI and EMAL will mostly be used in EOR given the estimated CO2-gas substitution
rate for EOR, expected gas price, and expected carbon price. But under dynamic
model different regimes were consider under different price of international natural
gas that will be explained different analysis.
5.2 Data collection and Assumptions
In system dynamic model we structure the carbon price depend on (GBM) as stated
earlier. The Figure 19 illustrates the structure of the carbon price that depends on
different variables over 20 years to calculate the carbon price for each hour. Alpha
represents the drift, whereas Sigma represents the volatility see table 20.
Figure 20: The structure of the carbon price
74
Table 20: The parameter of the model of carbon price
Parameters of the model Value Unit

Sigma 0.0033 percent
Alpha 0.00001 percent
Also we structured international natural gas price depend on the same concept of
carbon price that depend on (GBM). Figure 20 below shows the structures of
international gas price.
Figure 19: The structure of the International Gas Price
Table 21: The parameter of the model of international gas price
Parameters of the model Value Unit

Sigma 0.0033 percent
Alpha 0.000001 percent
75
5.3 Analysis Results and discussions
5.3.1 Analysis 1: Effects of production capacity expansion

For analysis 1 and analysis 2 has different value of international gas price see the
table below:
Table 22: The parameter of the model of international gas price for analysis 1 and 2.
Regime International Gas

Price ($/m^3)
Regime 1 0.247668
Regime 2 0.5
Under regime 2, Revenue rate is increase around 3% per year for all scenarios under
specific drift and volatility. Whereas, operating cost is constant over years for each
scenario. See figure 21
Revenue Rate ( Regime 2)

80000
60000
USD/Hour
40000
20000
0
1 2 3 4 5 6 7 8 9 10
Years
Figure 20: The Revenue Rate under regime 2
Under regime 1, all the scenarios are economically infeasible due to NPV is negative
see figure below. Under Regime 2 S7-HS-EOR (scenario 5-High Steel production and
used for enhance oil recovery) is financially viable project due to the NPV is stated as
76
"positive“ ( USD 2.190 M). Whereas, S10-HA-EOR (scenario 10-High Aluminum
production and used for enhance oil recovery) generates the highest NPV among all
scenarios (USD 319.61 M). This is due to capture costs can be compensated from
economic value-added CO2 for EOR. So that project is desirable and worth
undertaking see figure 22 below.
Project NPV alternatives

0
-0.5
-1
USD( Billion)
-1.5
-2
-2.5
-3
-3.5
-4
Figure 21: The NPV of different scenarios under regime 1

0.5
-0.5
USD (Billion)
-1
-1.5
-2
-2.5
-3
Figure 22: The NPV of different scenarios under regime 2
77
5.3.2 Analysis 2: Effects of Flue Gas Treatment Percentage
Under regime 1, the results show that all projects are not worth undertaking and
financially infeasible this is due to the price of international natural gas is very low
comparing to the price under regime 2. See figure 24.

0.00
-0.50
USD (Billion)
-1.00
-1.50
-2.00
-2.50
Figure 23: The NPV of different scenarios under regime 1 analysis 2
Under regime 2, that project of S7-HS-EOR (scenario 7-High Steel production and
used for enhance oil recovery) is financially viable and generate (USD 2.189 M). But,
the project of S10-HA-EOR (scenario 10-High Aluminum production and used for
enhance oil recovery) is more desirable due to the highest NPV among all scenarios
and generate the same NPV of analysis 1 (USD 319.61 M) due to the same reason of
analysis 1 see figure 25. I noticed that, the price of the international natural gas play
an important role on the decision of different strategies in certain hours.
78
0.50
0.00
USD ( Billion) -0.50
-1.00
-1.50
-2.00
-2.50
-3.00
Figure 24: The NPV of different scenarios under regime 2 for analysis 2
5.3.3 Analysis 3: Effect of CO2 source with production Capacity
Under this analysis, different regimes were design to evaluate different strategies
under constant international natural price with different drift. See the table 23.
Table 23: The parameter of the model of international gas price and drift.
Regime Drfit International Gas

Price ($/m^3)
Regime 1 0 0.4
Regime 2 0.00000330688 0.4
The results of regime 1 and regime 2 illustrate in figure 26,27 respectively.

0.00
-0.50
-1.00
USD
-1.50
-2.00
-2.50
-3.00
79
Figure 25: The NPV of different project under regime 1 for analysis 3

0.50
0.00
-0.50
-1.00
USD
-1.50
-2.00
-2.50
-3.00
Figure 26: The NPV of different project under regime 2 for analysis 3
Under Regime 1, all projects are not economically feasible, while regime 2 scenarios
S5-HS-EOR (scenario 5-High Steel production and used for enhance oil recovery) is
worth undertaking and generate $ (886.43 M) over a 20 period of time
5.3.4 Analysis 4: Decisions Rule

In this analysis, different decisions rules have been used to evaluate and validate each
scenario under each case. We first identify different decisions rules when no capture of
CO2 from EMAL and ESI plant will be happened. Then second and third decisions
rules identify when the captured carbon can be used for EOR or sequestrated in
permanent storage, respectively. A numerical analysis can then be performed to
specify which condition will be met under each case. Then we estimate the maximum
net value added from different cases. The key variables are defined as following as
well as different decisions rules:
Goil : Natural gas from oil production (m3)

Geor : Natural gas for Enhanced Oil recovery (m3)
GQatar : Imported Natural Gas from Qatar (m3)
GMarket : Imported Natural Gas from international market (m3)
D : Domestic demand of natural gas (m3)
Pi : International price of natural gas ($/m3)
Pq : Price of natural gas from Qatar ($/m3)
PCO2 : Price of carbon credit ($/ton)
80
Ed : Economic value of domestic gas consumption ($/m3)
Koil : Cost for natural gas extraction in oil production ($/m3)
Kgas : Cost for enhanced oil recovery with natural gas ($/m3)
Keor : Cost for enhanced oil recovery with CO2 ($/m3)
K CO2 : Cost for storage of CO2 in geological formation
CO2 : Amount of total CO2 captured (ton)
C eor : Amount of CO2 to be used for EOR (ton)
C sa : Amount of CO2 to be stored in geological formation (ton)
NVA : Net value added ($)
C sa = CO2 – δ Geor
GA.G = Geor – CO2/ δ
**Decision Rule:
No capture of CO2: if NVAno CO2 capture ≥ max (NVACO2 for EOR, NVACO2 for storage)
CO2 for EOR: if NVACO2 for EOR ≥ max (NVAno CO2 capture, NVACO2 for storage)
CO2 for Storage: if NVACO2 for storage ≥ max (NVAno CO2 capture, NVACO2 for EOR)
5.3.4.1 Case 1: Benchmark (No CO2 capture)
(1) When D < Goil-Geor

- Domestic consumption of gas = D
- Exported gas = Goil – Geor + GQatar – D
- Vd: Value added from domestic consumption of gas = D.E d
- Ve: Value added from export of gas = ( Goil – Geor + GQatar – D).Pi
- X: Cost = Goil.Koil + Geor.Kgas + GQatar.PQ
- NVA = Vd + Ve - X = D.Ed + ( Goil – Geor + GQatar – D).Pi – (Goil.Koil + Geor.Kgas +
GQatar.PQ)
= D.Ed + Goil .Pi – Geor .Pi + GQatar .Pi – D .Pi – Goil.Koil – Geor.Kgas – GQatar.PQ
(2) When D > Goil-Geor if Goil-Geor + GQatar > D

- X: Cost = Goil.Koil + Geor.Kgas + GQatar.PQ
- NVA = Vd + Ve - X = D.Ed + ( Goil – Geor + GQatar – D).Pi – (Goil.Koil + Geor.Kgas +
GQatar.PQ)
= D.Ed + Goil .Pi – Geor .Pi + GQatar .Pi – D .Pi – Goil.Koil – Geor.Kgas – GQatar.PQ
(3) When D > Goil-Geor + GQatar

- Imported gas = D – (Goil – Geor + GQatar )
- Ve: Value added from import of gas = – (D – (Goil – Geor + GQatar )). Pi = – (GMarket) . Pi
- X: Cost = Goil.Koil + Geor.Kgas + GQatar.PQ + GMarket. Pi
- NVA = Vd – Ve –X = D.Ed + (GMarket) . Pi – Goil.Koil – Geor.Kgas – GQatar.PQ – GMarket . Pi
= D.Ed – Goil.Koil – Geor.Kgas – GQatar.PQ
81
5.3.4.2 Case 2: Use CO2 for EOR
(1) When D < Goil

- Exported gas = Goil + GQatar – D
- Ve: Value added from export of gas = (Goil – D) .Pi + (GQatar).Pi
- X: Cost = Goil.Koil + Ceor.Keor + GQatar.PQ
- NVA = Vd + Ve – X = D.Ed + ( Goil + GQatar – D).Pi – Goil.Koil – Ceor.Keor – GQatar.PQ
- NVA = D.Ed + Goil .Pi + GQatar .Pi – D.Pi – Goil.Koil – Ceor.Keor – GQatar.PQ
(2) When D > Goil if Goil + GQatar > D

- Exported gas = Goil + GQatar – D
- Vd: Value added from domestic consumption of gas = D.Ed
- Ve: Value added from export of gas = (Goil + GQatar – D).Pi
- X: Cost = Goil.Koil + Ceor.Keor + GQatar.PQ
- NVA= Vd + Ve – X = D.Ed + (Goil + GQatar – D).Pi – (Goil.Koil + Ceor.Keor + GQatar.PQ)
- NVA = D.Ed + Goil .Pi + GQatar .Pi – D.Pi – Goil.Koil – Ceor.Keor – GQatar.PQ
(3) When D > Goil + GQatar

- Imported gas = D – (Goil + GQatar)
- Ve: Value added from import of gas from international market = – (D – Goil– GQatar )
.Pi =
(– GMarket ). Pi
- X: Cost = Goil.Koil + Ceor.Keor+ GQatar.PQ + GMarket. Pi
- NVA= Vd – Ve – X = D.Ed – (– GMarket ). Pi – Goil.Koil – Ceor.Keor – GQatar.PQ – GMarket .Pi
- NVA= D.Ed – Goil.Koil – Ceor.Keor – GQatar.PQ
5.3.4.3 Case 3: Use CO2 for Storage

(1) When D < Goil – Geor

- VCO2: Value added from CO2 in storage = Csa. PCO2
- X: Cost = Goil.Koil + Geor.Kgas + GQatar.PQ + Csa.KCO2
- NVA = Vd + Ve + VCO2 – X = D.Ed + ( Goil – Geor + GQatar – D).Pi + Csa. PCO2 – (Goil.Koil
+ Geor.Kgas + GQatar.PQ + Csa. K CO2)
- NVA = D.Ed + Goil .Pi – Geor .Pi + GQatar .Pi – D .Pi+ Csa. PCO2 – Goil.Koil – Geor.Kgas –
GQatar.PQ – Csa. KCO2
(2) When D > Goil – Geor if Goil – Geor + GQatar > D

- Vd: Value added from domestic consumption of gas = D.Ed
82
- X: Cost = Goil.Koil + Geor.Kgas + GQatar.PQ + Csa. KCO2
- NVA = Vd + Ve + VCO2 – X = D.Ed + ( Goil – Geor + GQatar – D).Pi + Csa. PCO2 – (Goil.Koil
+ GQatar.PQ + Csa. K CO2)
- NVA = D.Ed + Goil .Pi – Geor .Pi + GQatar .Pi – D.Pi + Csa. PCO2 – Goil.Koil – GQatar.PQ –
Csa. K CO2
(3) When D > Goil – Geor + GQatar

- Imported gas = (D – (Goil – Geor + GQatar ))
- Ve: Value added from import of gas = – (D – (Goil – Geor + GQatar )). Pi = – (GMarket) . Pi
- X: Cost = Goil.Koil + GQatar.PQ + GMarket. Pi + Csa. KCO2
- NVA = Vd – Ve –X = D.Ed + (GMarket) . Pi – Goil.Koil – GQatar.PQ – GMarket . Pi – Csa. K CO2
- = D.Ed – Goil.Koil – Geor.Kgas – GQatar.PQ – Csa. K CO2
5.4 Analysis Results and discussion for analysis 4:
In this section, the results of the three different decision rules for the net present value
will be presented and discussed under different regimes see the table below:
Table 24: The parameter of the model of international gas price and drift.
Regime Drfit International Gas
Price ($/m^3)
Regime 1 0 0.247
Regime 2 0.00000330688 0.247
83
Table 25: Different decisions rule in the Analysis.
D1- D2- D3-

Decisions rule BM- CO2- CO2-
without EOR SA
CC
Percentage of Capacity for Production 1 1 1

EMAL
Percentage of Capacity for Production 1 1 1
ESI
Percentage of Flue Gas to be treated 0 1 1
with Carbon Capture EMAL
Percentage of Flue Gas to be treated 0 1 1
with Carbon Capture ESI
Percentage of CO2 to be used for 0 1 0
EOR
As we stated earlier, we identify three decision rules to validate each scenarios under
different cases in order to estimate the maximum NPV from different cases. Scenarios
considered for the analysis are shown in Table 25.
1- Decision rule 1: Bench mark case when there is no carbon capture.
The Decision rule 1 was simulated without carbon capture process and different
scenarios were built under this decision. We found the scenario that state when
domestic demand greater than Natural gas for Enhanced Oil recovery subtract from
Natural gas from oil production plus the imported natural gas from Qatar met the
condition of decision rule 1. Whereas, Both scenario 1 (when D > Goil-Geor) and
scenario 2 (D > Goil- Geor if Goil-Geor + GQatar > D) don’t satisfy the decision
rule of no capture of CO2 case. The following figure shows the Net Value Added
under decision 1.
84
Net Cash Flow Case 1
-1 M
-1.25 M
USD/hour
-1.5 M
-1.75 M
-2 M
0 43800 87600 131400 175200
Time (hour)
Net Cash Flow Case 1 : D3-CCS-SA
Net Cash Flow Case 1 : D2-CCS-EOR
Net Cash Flow Case 1 : D1-BM-Without CCS
Figure 27: The Net Cash Flow for Case 1
2- Decision rule 2: Use CO2 for EOR
This case was depending on CO2 to be used for EOR purposes and it was simulated
under three different decision rules. We found that scenario 3 which is When D > Goil +
GQatar met the decision rule 2. Whereas, the others scenarios do not met the decision
rule 2. In the figure 29 shows the Net Cash flow for Decision rule 2 increase sharply
then increases slightly for the remaining hours under regime 1 when the drift equal
3.30688e-006. Whereas, figure 30 illustrate the Net Cash flow for Decision rule 2
under regime 2 when the drift equal zero.
85
Net Cash Flow Case2
2M
1M
USD/hour
-1 M
-2 M
0 43800 87600 131400 175200
Time (hour)
Net Cash Flow Case2 : D3-CCS-SA
Net Cash Flow Case2 : D2-CCS-EOR
Net Cash Flow Case2 : D1-BM-Without CCS
Figure 28: The Net Cash Flow for Case 2 when the Drift equal to zero
Net Cash Flow Case2

2M
1M
USD/hour
-1 M
-2 M
0 43800 87600 131400 175200
Time (hour)
Net Cash Flow Case2 : D3-CCS-SA
Net Cash Flow Case2 : D2-CCS-EOR
Net Cash Flow Case2 : D1-BM-Without CCS
Figure 29: The Net Cash Flow for Case 2 when the Drift has value
3- Decision rule 3: Use CO2 for SA
Scenario 3 (When D > Goil – Geor + GQatar) met the condition for the decision rule 3.
Whereas, the scenario (D < Goil – Geor) and (D > Goil – Geor + GQatar) do not satisfy the
decision rule 3. NVA reduce sharply then remain constant over the remaining
hours see figure 31.
86
Net Cash Flow Case 3
-1 M
-1.25 M
USD/hour
-1.5 M
-1.75 M
-2 M
0 43800 87600 131400 175200
Time (hour)
Net Cash Flow Case 3 : D3-CCS-SA
Net Cash Flow Case 3 : D2-CCS-EOR
Net Cash Flow Case 3 : D1-BM-Without CCS
Figure 30: The Net Cash Flow for Case 3
Table 26: The Results of NPV for three decisions rules.
Regime D1-BM-Without- D2-CCS-EOR D3-CCS-EOR

CCS (NPV) (NPV) (NPV)
Regime 1 -2.501 B -1.251 B -1.236 B

Regime 2 -2.4999 B -1.249 B -1.234 B
5.5 Monte Carlo simulation results:
Under the dynamic model, we run different strategies in order to investigate the
probability distribution of uncertain variables such as the price of natural gas and
carbon in estimation of NPV for analysis 3 for some feasible project and non
feasible project. The results of Monte Carlo simulation are shown in the figures
below and table.
87
Figure 31: The result of probability distribution of scenario 2
The figure above illustrates the result of probability distribution for Monte Carlo
simulation for analysis 3 in particular for scenarios 2 to capture the CO2 from
emirates steel industry only and inject it for EOR purposes. We can see the
probability distribution is very sensitive and lies only on the grey area.
In the previous figure, also shows the probability distribution for Monte Carlo
simulation for analysis 3 under scenario 3 of capturing the CO2 from emirates
88
aluminum industry only and use for EOR purposes. Also the probability
distribution is lies in the grey area only due to sensitivity of the model.
S5-ESI-HS-CCS-EOR
50% 75% 95% 100%
Net Presesnt Value
175200
6e+021
4e+021
2e+021
-400 M
0
Time (hour)
Also in the figure above illustrates the probability distribution of the model and
give the same results of the previous results due to the same reason. In the table
below describes the result of min, max as well as other results for the previous
figures.
Table 27: The Results of probability distribution of for Monte Carlo simulation
Scenarios Min Max Mean Median StDev
S3-EMAL-CCS-EOR -1.080B -680.6M -917.12M -936.5M 129.5M

S2-ESI-CCS-EOR -180.1M -7.905M -86.51M -82.08M 52.33M
S5-ESI-HS-CCS-EOR -180.19 M 84.90M -35.57M -28.49M 80.47M
Capture EMAL
5.6 Break-even Analysis Results:
In the figure 34 shows the breakeven point for analysis 3 under static model in
particular for scenarios four that focus on percentage of capacity for production ESI
89
when it is very high and the point is very close to the zero due to the sensitivity of the
model relate to the cost of capture of CO2 from the two industries.
Figure 34: The Break-even point for scenario 4
Also in the figure 35 shows the breakeven point for analysis 1 under dynamic model
in particular for effects of production capacity expansion production ESI when it is
very high and the point is very close to the zero due to the sensitivity of the model
relate to the cost of capture of CO2 from the two industries.
90
Figure 35: The Break-even point for scenario 10
5.7 Conclusion:
In this model, we compared different scenarios under different analysis cases as
well as different decision rules for the last analysis, we conclude that by using carbon
dioxide gas for enhance oil recovery instead using it to store it in geological formation
will have a significant benefit in the economy of Abu Dhabi. Different scenarios were
worth undertaking and financially viable and the capture cost can be compensated
value-added from CO2 for EOR for the most cases. In addition, the dynamic analysis
shows that, without the introduction of new carbon capture technology, CCUS is
financially feasible in Abu Dhabi only when international natural gas and CO2 price
movement patterns are higher than historical prices.
91
CHAPTER 6
Conclusion
The target of this chapter is to summarize the outcomes of the study.
Recommendations for future works and possible studies conclude this chapter.
92
6.1 Conclusion
CCS is expected to play a key role in reducing greenhouse gas emissions with large
scale sequestration of CO2. In this study, we propose an incentive compatible carbon
price regulatory regime to align CCS with Enhanced Oil Recovery (EOR). We then
perform a numerical analysis on the macroeconomic effect of CCS with EOR on the
Abu Dhabi economy for CO2 capture from the steel and aluminum industries. Result
shows that in some analysis capture the CO2 from steel industry tends to generate
higher value added than aluminum industry due to energy penalty and high capture
cost under the static and dynamic models. In addition to the direct effect of CCS with
EOR that is captured with Net CCS Cash Flow, there is a need to further investigate
the indirect cost of CCS with EOR as a result of change of utility cost to the broad
industry due to change in gas supply.
6.2 Prospectus for Further Work
The model is structured in a way that deals with fixed and dynamic natural gas price
and carbon price over the twenty years under the subsidy of Abu Dhabi government.
Different technologies can be addressed to evaluate different project economically
under the capture cost and international natural gas and CO2 prices movement
patterns. Further work can focus on Computable General Equilibrium (CGE) model
that can be used to investigate more and to estimate how an economy might react to
change in policy with Carbon Capture and storage (CCS) technology in process of
industrial sector for Abu Dhabi emirates.
93
APPENDIX A
Abbreviations
ESI Emirates Steel Industries
AAS Aqueous Amino Acid Salt
ADNOC Abu Dhabi National Oil Company
ADFEC Abu Dhabi Future Energy Company
DRI Direct Reduced Iron
OOIP (Originally Oil in Place)
IOR Improved Oil recovery
GESAMP Group of Experts on the Scientific Aspects of Marine Environmental

Protection
IEA GHG IEA Greenhouse Gas R&D Programme
EPA Environmental Protection Agency’s
EOR Enhance oil recovery
UIC Underground Injection Control
PHMSA Pipeline and Hazardous Materials Safety Administration
CDM Clean Development Mechanism
CERs Certified Emission Reductions
CCLP Carbon Capture Legal Programme
CGE Computable General Equilibrium
CSP Concentrated Solar Power
SFZ Special Free Zone
PV Photovoltaic
94
RE Renewable Energy
IGCC Integrated Gasification Combined Cycle
HRSGs Heat Recovery Steam Generator
DR-EAF Direct Reduction-Electric
SEC Specific Energy Consumption
ASU Air Separation Unit
MT Metric Tonnes
MTPA metric tons per annum
95
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Carbon Capture and Storage and

Enhanced Oil Recovery: An Analysis

A Thesis Presented to the

© 2013 Masdar Institute of Science and Technology

elements in climate change mitigation as fossil fuel is projected to remain a major

potential permanent storage of CO2 by Masdar at suitable geological formation. This

production rate and the captured CO2 is used for EOR.

development and empowerment of the UAE and humankind.

most needed, he provided me constant encouragement and support in various ways.

I would like to record my gratitude to Mr. Mayuram Balasubramanian, from Masdar

my research as members of my committee.

I would like to thank my colleagues Wail Al Maeeni , Marwan Al Nuaimi and

Abudllah Kaya for their encouragement and support on my study. I am fortunate to

have worked alongside them during the completion of this study.

support I wouldn’t be where I am today.

Meshyeal Omran Lehssoni,

Masdar City, March 21 2013

Table 1: Existing CCS Projects [8] ........................................................................................... 8

Figure 1 : Schematic representation of carbon capture Technologies .................................... 10

1.1 Problem statement

The phenomenon of greenhouse effect which is also known as global warming is

atmosphere is absorbed by the planet's surface. Part of absorbed energy radiation

radiates upwards as infrared radiation (heat) and part of it absorbed by greenhouse

change in extreme climate events.

The Intergovernmental Panel on Climate Change (IPCC) highlighted anthropogenic

land-use changes. Since the beginning of industrial revolution 1750s atmospheric

per year respectively [2].

energy use has become greater.

enhance country’s economic development, simultaneously. The United Arab Emirates

demand by Dolphin Pipeline.

change by reducing anthropogenic CO2 emission in the atmosphere. In 1992, Global

made greenhouse gas concentration in the atmosphere by The United Nations

Framework Convention on Climate Change (UNFCCC). In 1997, Kyoto protocol,

Development Mechanisms (CDM) and Emission Trading (ET).

CO2 emission from major source, consisting of employing energy efficiency,

widespread use of renewable energy (commercial biomass, geothermal, wind, and

solar energy), nuclear power, carbon-free or reduced-carbon energy resources, new

projects by 2050 [5].

change (UNFCCC) as Non-Annex 1 Party to the convention. Different efforts from

combustion source of carbon emitting industrial plants.

from carbon credit under Clean Development Mechanism if carbon price is

1.3 Research Objective

The dissertation intention is to develop economic model to evaluate various carbon

natural gas and carbon can be implemented at any given time.

present values and their probabilities are given as a probability distribution.

in managerial, organizational and socioeconomic context.

The remainder of this study is organized as follows: Chapter 2 focuses on literature

Analysis. Chapter 3 gives an introduction of SD modeling in order to show how this

2- Discuss the results of economic model.

Finally, Chapter 6 concludes this research by providing recommendations and

prospectus for future work.

(EOR), legal and regulatory of CCS as well as Clean Development mechanism

of nuclear energy, hydroelectricity and renewable energy [8].

that guarantees its long-term isolated from atmosphere in a secure location.

enormous underground capability and relatively mature injection technology [9].

the atmosphere [10].

According to Energy Technology Perspectives 2008 analysis, in the absence of new

stabilization of GHG concentration after evaluated different strategies by ETP BLUE

several demonstrated projects are in operation involve CCS technologies such as

Table 1: Existing CCS Projects [8]

2.1.1 Carbon dioxide Capture Technologies

combustion capture, post-combustion capture and oxyfuel combustion. Figure 1

above 99%, in spite of less concentration of CO2 can be accepted [8]