Economic Report 2020

ECONOMIC REPORT 2020

CCUS A key advantage of CCUS is that it can be retrofitted to existing industrial and energy systems. This means that it offers an option to support lowering emissions from industries and sectors which have relatively limited abatement opportunities. The OGA has estimated that the total levelised cost of CCUS is likely to be between £58–76/tCO 2 with the transport and storage element accounting for £12–30/t of this. 45 The exact figure will vary by project depending on capital and operational efficiencies, with the re-use of existing oil and gas infrastructure having the potential to reduce costs by 20–30 per cent in appropriate projects. This demonstrates the need to continue to invest tomaintain existing offshore infrastructure now to help develop net zero solutions in the future. OGUK members are involved in each of the industrial cluster projects outlined above, with investment plans predominantly being aimed at the transport and storage of carbon from industrial sites to offshore reservoirs. Current plans are aligned with developing three infrastructure

hubs to service the five initial industrial cluster projects. This would provide the capacity to transport and store 10 mtCO 2 /year and store a cumulative 33 mtCO 2 by 2030. OGUK estimates that this will require investment in the region of £2–2.5 billion through to 2030 in developing transport and storage infrastructure. Unlike some other emerging areas, the UK is already positionedwelltomoveintoCCUS.ThedevelopmentofaCCUS industry provides significant growth opportunities across the value chain for supply chain companies, with existing oil and gas capabilities mapping well against CCUS requirements. Taking advantage of opportunities in the UK to build a competitive edge for supply chain companies will also open up a significant pipeline of global opportunities. Rystad Energy estimates that around $35 billion of expenditure will be unlocked in European CCUS projects between 2020-35. Rystad expects that around half of this spend will be related to capture processes, with remainder being on storage (15 per cent) and transport and other operations (35 per cent).

Explore and Appraise

Develop

Operate and maintain

Decommission

Wells & drilling

Infrastructure management

Welldecommissioning

Reservoir & subsurface management

Facilities, plant engineeering & management Marine services & subsea engineering

Support services

Capture E&P Business Cycle CCUS Business Cycle

Use

Transport

Storage

Reservoir & subsurface management Wells & drilling

Marine services & subsea engineering

Infrastructure management

Facilities, plant engineeering & management Support services

45 https://www.ogauthority.co.uk/media/6630/ukcs_energy_integration_annex-2-ccs-final-august-2020.pdf

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