Capital / Operating Costs for Storage in the Identify stage

Objective

To enumerate the potential cost ranges for the storage site options that have been identified as candidate sites during the ‘Identify’ stage

Major Deliverables

• A version controlled assumptions book setting out the baseline cost, risk and contingency amounts for the storage site options identified at this stage.  This will be developed and updated during the evaluation and define stages of the project.  It will provide a sound basis for the dialogue on costs, price and risk sharing later in the project with grant funding agencies as these will likely require this information in order to better understand and evidence internally the value for money case being provided by the project
• A report on the initial cost estimates for the storage solution options identified. This report should provide a summary comparison of the costs and cost uncertainty drivers for each of the storage site options identified and an initial profile of the capital cost spend and annual operating costs

Tasks

Specific tasks include the following:

• Enumerate the base costs associated with the potential storage site field options on the basis of the initial technology screening studies and knowledge of the field capacity / injection pressures.  This will need to take into account the uncertainties in relation to the engineering, geological and regulatory aspects of the storage solution
• This will cover capital costs associated with and including, but not limited to:
• Storage site development costs including:
  • Licensing / permitting activities
  • Site characterisation activities
    • Seismic data acquisition (2d / 3d)
    • Seismic data analysis (2d / 3d)
    • Preparation and verification of reservoir model
  • Core sampling and analysis
  • Pilot injection testing (equipment and consumables)
  • Drilling rig hire
  • Accommodation rig hire (for onshore this would be the costs associated with establishing a compound or equivalent)
  • Injection facilities
    • Process equipment (including gas – oil separation with EoR)
    • Pumps
    • Valves
    • Controls
  • Well work-overs
  • CO2 metering
  • Monitoring measurement and verification equipment        
•   This will cover operating costs associated with and including but not limited to:
• Monitoring measurement and verification activities during and post-injection phase
• Costs of the storage liability provision relevant to the situation in the particular jurisdiction
• Utility costs (electricity, fuel)
• Staffing costs
• Consumables
• Spares etc
• From previous direct experience of CO2 injection where possible or using analogues where not, enumerate the estimates for the contingency amounts for each of the major items of plant and equipment within the injection and storage site solution options identified
• Initial quantification of the cost impact of the risks identified for the storage site options.  This needs to communicate the overall cost quantum that the risks account for so that the risk amounts can be developed as the storage solution progresses through the Evaluate and Define stages.  It will provide the necessary visibility to key risks when the commercial discussions on risk sharing and demonstration risk take place during negotiations with project partners and funding agencies.  This will also aid in understanding where each party is able to best add value to the project and evidence value for money
• Prepare and populate a version controlled base line assumptions book that sets the framework for documenting the development of and increased granularity in the capital and operating cost line items as the project moves through the Evaluate and Define stages.  For each line item in the cost estimates the assumptions book should at least state:
  • General description of the line item
  • Cross referencing to the financial model inputs
  • Scope of supply included in the cost estimate
  • Base cost
  • Contingency amounts
  • Risk costs, likelihood / probability of occurrence, driving risk factor(s) and cross reference to the risk register
  • Reference costs / benchmark sources.
  • Timing of the cost being incurred

Examples

• The Cost of Carbon Capture and Storage Demonstration Projects in Europe: DOI:10.2790/18793
• The costs of CO2 capture, transport and storage

Key Personnel

• Project Manager and staff
• Cost estimation work-stream lead
• Engineering work-stream lead
• Process work-stream lead
• Mechanical work-stream lead
• HV electrical work-stream lead
• Civil work-stream lead