Spain's Repsol has ambitious plans for a carbon capture and storage (CCS) project alongside its grassroots Sakakemang giant gas project onshore Sumatra, Indonesia.

The CCS scheme, which will see some 2 million tonnes of carbon dioxide stored annually, is scheduled to start in 2027 and will be developed simultaneously with its Sakakemang (Kali Berau Dalam) gas field development.

It will be the first CCS project deployed by Repsol and the first in Indonesia, the operator has stated.

Britain's BP also has plans for a similar scheme at its Tangguh liquefied natural gas project in West Papua province.

In Repsol's case, the captured CO2 will be stored in two depleted gas fields — Gelam and Dayung — located on the contiguous Corridor production sharing contract.

US major ConocoPhillips is the current operator of the Corridor block and Repsol holds a 36% stake in the PSC there, although the Spanish player has been touted as a possible suitor for acquiring ConocoPhillips’ equity too.

A total of 30 million tonnes of CO2 emissions from Sakakemang are expected to be cumulatively avoided through 2040 due to the CCS scheme, according to Repsol.

Introducing Accelerate Hydrogen
We're pleased to announce the launch of Accelerate Hydrogen - the latest newsletter from Recharge and Upstream. Sign up now for an unbiased, clear-sighted view of the latest developments in the fast-growing hydrogen sector every week.

The operator has already completed regional and basin analysis of potential sites for the Sakakemang CCS project and has identified Gelam and Dayung as storage contenders.

It has also identified saline aquifers for potential upside although Repsol hopes to have two more storage candidates before the end of the year.

Other ongoing work to be completed by December 2021 includes seal analysis, injection modelling and risk assessment.

From next year Repsol will embark on detailed characterisation of its qualified CCS sites.

The Kali Berau Dalam-2X discovery made in February 2019 delivered more than 2 trillion cubic feet of gas, the largest discovery in Indonesia in the past decade.

However, this giant find comes with a high CO2 content of 26% while Repsol has a commitment that all its greenfield projects need to be net zero.

Mikel Erquiaga, the company’s director of regional exploration eastern hemisphere, told last week’s Repsol Low Carbon Day that that one of the main challenges facing the Sakakemang CCS project was the regulatory framework.

However, Indonesia’s Ministry of Energy & Mineral Resources has established a task force with the aim of having CCS regulations in place by the end of the year.

Another challenge is that the cost of the CCS scheme will be borne by the partners — Repsol, Petronas and Moeco — although captured and stored CO2 could be the “subject of future trading”.

He said that cost is a key parameter for Repsol, noting that CCS has four key components — the capture, compression and dehydration, transportation and sub-surface storage.

Capture can account for some 70% of the total cost, while the cost of compression and dehydration is “very low — only about 5%”, said Erquiaga.

Meanwhile, transportation can be “expensive — in the range of 10%” and CO2 storage is around 15%.

“Obviously we are not including capture [costs] as we are not going to capture, we are just going to separate the gas from the CO2,” he said. “So, there is no capture process implicit.”

Preliminary cost calculations

Repsol’s preliminary calculations for the Sakakemang CCS project envisage costs of $8.1 per tonne of CO2 for compression and dehydration, $3.4 per tonne for CO2 pipeline transportation, $7 per tonne for CO2 injection and storage, and $2.2 to $2.5 per tonne for CO2 monitoring and verification.

The Spanish operator has embarked on an aggressive appraisal campaign since the landmark KBD discovery.

The KBD-3X appraisal well was completed earlier this year while a long-term test on the KBD-2X discovery well and pressure monitoring in the KBD-3X well are ongoing.

The objectives of the appraisal programme are to confirm the reserves volumes associated with the discovery well and confirm connectivity between the two wells.

Partners in the Sakakemang PSC are operator Repsol and Petronas with 45% apiece and Moeco on 10%.

“This is the first [CCS] project that Repsol is doing but there will be more in the future. I really hope that we can come out of [Sakakemang] with some creative solutions to help our assets to decarbonise,” said Erquiaga.

“The ambition is to turn this CCS activity into a business — today it is not a business in itself because it requires a lot of subsidies.”

The Spanish operator last week said it would allocate a further €1 billion ($1.16 billion) to low-carbon projects through 2025, increasing the total in the 2021-2025 timeframe to €6.5 billion.

Repsol hails itself as the first oil and gas company to announce a net zero commitment by 2050.

It is scaling down investments in conventional upstream operations while conventional exploration skill sets are being repurposed to low carbon exploration initiatives aligned with this commitment, the company said.