1.2 Scope

Based on these aims, the focus of our work is to estimate in broad terms -

(a) the costs of transporting and storing CO2 from gas discoveries in South-East Asia, and

(b) the potential for CO2 injection through enhanced oil recovery, enhanced gas recovery, conversion of natural gas and CO2 mixtures to liquid hydrocarbon.

As part of the assessment, we also examine the possible effects on potential CO2 transport and storage projects of the fiscal terms that currently apply to gas developments as well as potential regulatory issues associated with such projects.

We analyse only the transport and injection of CO2 and not CO2 separation (or "CO2 capture") from the mixed gases extracted from the subsurface. Therefore, we do not analyse the entire natural gas development. We analyse only the additional costs of transporting and storing the produced CO2.

We make detailed quantitative analyses of CO2 injection into saline formations. We do not make equivalent analyses of enhanced oil or gas recovery. This approach is necessary because sufficiently detailed data on oil and gas discoveries in South-East Asia is not publicly available. However, our report includes a qualitative assessment of the potential for the application of these technologies.

We cover the following economies in our analyses and comments — Brunei, Indonesia, Malaysia, Papua New Guinea, Thailand and Vietnam. These economies are APEC members in South-East Asia, have natural gas production and, in some cases, natural gas production with significant associated CO2 emissions.

Given the extensive geographical scope of the study, we do not attempt to analyse CO2 transport and injection in detail. Our aim is to present broad indications of the economics of storing CO2 emissions from gas developments in the South-East Asian region.