1. CO 2 Capture and Geological Storage Demonstration at In Salah, Algeria Iain Wright (CO2 Project Manager, BP Group Technology) UNCTAD Africa Oil & Gas Conference April 4th 2006

2. Agenda Impacts of Climate Change CO 2 Capture & Storage Technology –Global Potential –Deployment Costs –Starting the Hydrogen Economy Focus on the In Salah Project Summary

3. Impacts of Climate Change: Rainfall Change by 2100 Increase Decrease

4. Technology Options for GHG Stabilization The Stabilisation Wedge Emission trajectory to achieve 500ppm Emission trajectory BAU 1 GtC Slices of the Stabilisation Wedge

5. CO 2 Reduction Options ($/te) Source: European Commission Report (Jan 2004), DoT, DTi (2003), BP Analysis CO 2 reduction costs ($/tCO 2 ) Power Generation (Fixed Sources) Transport (Mobile) Cost of CO 2 mitigation (above today’s economics)

6. CCS Technology Maturity CO 2 Capture Post-Combustion Pre-Combustion (Hydrogen) Oxyfuels $40-100+/Tonne CO2 Geological Storage Enhanced Oil Recovery Saline Aquifer Formations Depleted Oil/Gas Reservoirs Enhanced Coal Bed Methane High Purity Sources Amines, Membranes, H2 Most of the elements required for CO 2 Capture & Storage (CCS) are already deployed at commercial scale, but integration for GHG mitigation is not happening due to the high cost and lack of policy framework Transport Pipelines Ships Depends on distance

7. When will CCS be Deployed? $/T CO 2 CCS Costs CCS Benefits Hi Purity CO 2 EOR/Storage $100 EU ETS, CDM, JI $10-25 2008, 2012? 2006 When is Crossover?? Widespread Deployment EOR/EGR Time

8. Creating Value for CCS UN IPCC CCS Special Report: CCS is now recognised as a GHG mitigation technology. Subject to: –Long-term Storage Assurance –Regulatory Framework EU Emissions Trading Scheme (Linking Directive) will allow geological storage. Subject to: –Long-term Storage Assurance –Regulatory Framework In Salah is a world-class CCS project that can develop: –Long-term Storage Assurance –Regulatory Framework

9. ETS CO2 Prices (€)

10. CCS 2006: Key Challenges 1.Reducing the Costs –Mainly Capture, Capital cost and Efficiency –Target: $20-30/t CO 2 2.Public and Regulatory Acceptance that Geological Storage is Safe and Effective: –Storage Integrity & Leakage: Public/NGO acceptance –Governments: Legal & Regulatory 3.Securing Commercial Value Develop Commercial Incentives –Market Eligibility (CDM,ETS) } } In Salah CO2 JIP

11. Focus on In Salah (Algeria) Industrial Scale Demonstration of CO 2 Geological Storage (Conventional Capture) Started Storage in August 2004 1mmtpa CO 2 Stored (17mm tonnes total) $100mm Incremental Cost –No Commercial Benefit Test-bed for CO 2 Monitoring Technologies

12. In Salah 2004 (Three Projects) In Salah Project(s) Overview –In Salah Gas Development (1bcf/d $2,000 million) –In Salah CO 2 Storage (1mmtpa $ 100 million) –In Salah CO 2 Assurance R&D (CSLF, EU) $ 30 million)

13. 1. In Salah Commercial Project –In Salah Gas Development (1bcf/d $2,000 million)

14. In Salah Gas Project 5-10% CO2 <0.3% CO2 The In Salah Gas Project

15. In Salah Gas Processing Plant Import Gas Pipeline from Teguentour and Reg Export Gas Pipeline to Hassi R’Mel & Europe (1 BCF/d) CO2 Storage Pipeline to Krechba

16. 2. In Salah CO2 Storage –In Salah CO 2 Storage 1mmtpa $100 million No Commercial Benefit

17. In Salah 25 Year CO 2 Profile Only the separated (yellow) CO2 will be stored – the combustion CO 2 (blue) will be vented

18. In Salah CO 2 Storage Operation

19. CO2 Storage Infrastructure 50mmscf/d CO2 (1mmtpa) Compression Transportation Injection Storage Krechba 501 Pilot hole plus 1250 metres of horizontal section

20. 3. In Salah CO2 Assurance –In Salah CO 2 Assurance R&D (CSLF EU $30 million) Joint Industry Project (JIP) Could provide a commercial return for CO2 storage

21. Joint Industry Project Objectives 1.Provide assurance that secure geological storage of CO 2 can be cost-effectively verified and that long-term assurance can be provided by short-term monitoring. 2.Demonstrate to stakeholders that industrial-scale geological storage of CO 2 is a viable GHG mitigation option. 3.Set precedents for the regulation and verification of the geological storage of CO 2, allowing eligibility for GHG credits

22. Option for Permanent Seismic Pre-cursor 3D

23. Summary CCS can make a major contribution to GHG reduction –Application to all hydrocarbons (coal, oil, gas) –Breaks the link between hydrocarbons and GHG –Application to many sectors (power, cement, steel) –Cost-comparable to other low-carbon options –Enables GHG-free hydrogen from hydrocarbons Widespread deployment requires long-term, supportive Policy Frameworks Algeria is leading the way !