Energy consultancy Xodus Group has completed a review into tariffs for a carbon capture utilisation and storage (CCUS) project in the Netherlands that is set to store emissions from Shell and other industry players.
The review for the Dutch Ministry of Economic Affairs analysed proposed fees for the transport and storage requirements of the Porthos project, a joint venture between the Port of Rotterdam Authority, Gasunie and EBN.
Porthos is seeking to transport CO2 from industry in the Port of Rotterdam to empty gas fields beneath the North Sea.
Big names on board
Porthos plans to transport and store CO2 from a variety of companies, including Shell, ExxonMobil, Air Liquide and Air Products, which signed joint development agreements in autumn 2019.
They will supply their CO2 to a collective pipeline running through the Rotterdam port area before being pressurised in a compressor station about 20 kilometres offshore where it will be pumped into an empty gas field reservoir more than three kilometres beneath the sea.
Jonathan Fuller, global head of advisory and energy transition at Xodus Group, said: “The Porthos project has the potential to make a significant contribution to helping the Netherlands reach its carbon reduction targets.
“CCUS is still relatively in its infancy, which creates uncertainty around cost models. We analysed other global projects, both planned and in operation, taking into consideration peak CO2 rates, capital and operating expenditures and relevant country taxes.
"The Porthos model, with multiple suppliers and a shared backbone is currently the most developed of its kind, so to ensure the review was robust we modelled the design in our cost estimating software which yielded a very similar tariff result, giving the certainty needed to move forward.”
It is expected to be able to store about 2.5 million tonnes of CO2 per annum in its early years, with plans to be operational by 2024.
Xodus said the study involved a top-down benchmarking analysis, where the project was compared to other planned CCUS developments globally with a focus on similar CCUS backbone suppliers.
Xodus also recreated the Porthos design in its cost estimating software and database to arrive at an independent tariff estimate and range.
The two approaches yielded similar transport and storage ‘best estimates’, of around €50 ($59) per tonne, encouragingly close to the figures calculated by Porthos.
The Netherlands has objectives to reduce greenhouse gases by 49% in 2030 and 95% in 2050 compared with 1990.