TRANSPORT COST TEAM KICK-OFF, BERLIN 14 TH SEPTEMBER 2009 Per Arne Nilsson, IM Skaugen SE

Agenda 14/09 – TCWG => Transport Cost Team Two-Hour Workshop – hrs Introductions Guidelines & Objectives Transport Scenarios, Commercial and Demonstrator phase/s/ Key Assumptions for Transport Cost Elements References and Basis for Cost Analysis Work Process & Plan AOB

Transport Cost Team Guidelines Proposed TC Team Guidelines Openness and Transparency results Involvement and Individual Contribution results Responsibility and Time-keeping trust Generous sharing enhanced competence

Transport Cost Team - Objectives Proposed TC Team Objectives ZEP consensus about transport costs Embraced and Representative Scenarios Cover published Reports & References Quality Assurance through Efficient Leg-work

Transport scenarios - Commercial phase Commercial phase: Identify and describe three (?) representative transport scenarios with a minimum transported volume (e g 10 mT CO 2 p a) Both Clusters and Point-to-Point Trunk-and feed-in pipelines, hub solutions, river shipping and sea-going ship transport Maximum pipe-line distance 750 km Maximum shipping distance km Evaluate published reports cost analyses Extrapolate to the identified scenarios Source: McKinsey, Carbon Capture and Storage: Assessing the Economics

Transport scenarios - Demonstrator phase Demonstrator phase: Identify and describe three representative and different transport scenarios (point-to-point) each for a minimum of 2 mT CO 2 p a Evaluate published reports cost analyses Extrapolate to the identified scenarios List Demonstrator Candidate Projects (of relevant size) Identify characteristics and stakeholders Suggested list from Storage Cost Group Selection criteria if needed What is representative, how many cases if not all ? Accessibility of the data Source: McKinsey, Carbon Capture and Storage: Assessing the Economics

Key assumptions Assumptions to be discussed and agreed upon in Berlin: Agree typical transport flow charts For each typical case, define battery limits For each typical case, define optimal conditioning (pressure/temperature) For pipeline: Booster stations, distances, pressure drop For ship: Discharge mode (liquid or re-gasified) Injection parameters, continuous or intermittent, pressure, temperature, capacity (t/d)

Cost elements Define the main (> XX%) cost elements (CAPEX/OPEX): Booster stations Pipeline On-shore Off-shore Permitting Ship Intermediate Storage Agree methodology per cost element Collect technical and cost data from ZEP participants and industrial benchmark figure Discuss uncertainty ranges Participants to list (individually) main cost elements before Berlin. Send to TCWG-lead (PAN)

References and Basis for Cost Analysis Listed cost items, identify assessment methodology Define a detailed list with associated relevant parameters and unit costs Apply to transport case cost model References (Suggestions are welcome): Pöyry, 2007: Analysis of Carbon Capture and Storage Cost-Supply Curves for the UK Sean T. McCoy, Edward S. Rubin, Carnegie Mellon University, Pittsburgh 2007: An engineering-economic model of pipeline transport of CO 2 with application to carbon capture and storage Professor Alexander G. Kemp and Dr Sola Kasim, University of Aberdeen, 2009: A Futuristic Least-cost Optimization Model of CO 2 Transportation and Storage in the UK/UK Continental Shelf (UKCS)

Overview Work Procedure ScenariosAssumptionsCost ElementsCost AnalysisConsensus Start in Berlin 14 th Sept Collect in ZEP Agree elementsMethodology Identify published estimates

Workflow: Transport cost analysis Kick-off – Berlin 14 th September Scenarios List Demonstrator candidate projects, evaluate accessibility of data, take on operators Identify criteria for Commercial term scenarios 2.Define the critical Key Assumptions (deliver to capture and storage groups) 3.Agree on the boundaries and battery limits 4.Discuss and agree relevant published References, share distribution Following Berlin 1.Transport Cost Elements: Identify main CAPEX/OPEX items - benchmark with existing studies 2.Cost analysis methodology – Assign model responsibility 3.Collect Cost Element (unit costs) estimates, evaluate model and benchmark with Referenced Literature 4.Prepare report, presentation and ZEP-hearing 5.Peer Review / Quality Assurance