Representative case analyses

We analyse CO2 transport and storage from representative natural gas discoveries in geological formations across South-East Asia. The representative analyses illustrate the design of CO2 transport and injection, its capital, operating and decommissioning costs, as well as the specific cost of CO2-e avoided (see Section 4 for a definition of this). A schematic diagram of the process is shown below. We assume that the storage site is sited 10 km from the production facility.

The analyses are based on limited cost and reservoir data and incorporate a large margin of error. This reflects the high degree of uncertainty in estimating injection reservoir characteristics and unit costs.

Our best central estimates of the cost per tonne avoided are shown below ignoring the effects of the fiscal terms. We estimate the range of costs for individual basins from US$4 to US$67 per tonne of CO2-e avoided in US$2010 terms depending on the project. Typically, approximately a quarter to a half of the cost is for injection wells and platforms. Compression machinery and associated platforms account for a further quarter of the costs. The capital costs for the projects range from approximately US$70 million to almost US$5 billion.

Costs per tonne of CO2-e avoided for different formations across South-East Asia

Economies of scale have a significant effect on costs per tonne of CO2-e avoided. The scatter diagram below illustrates this. It shows the results of all the cases analysed and the line of best fit between the estimated costs. The line of best fit shows that the specific cost of CO2-e avoided typically drops below US$20 per tonne avoided for injection rates over 1 Mt/yr and below US$10 per tonne for injection rates over 6 Mt/yr. For smaller injection rates the costs increase markedly.

The diagram shows that, ignoring fiscal considerations, many projects would be economic with a price of carbon of US$20 per tonne.

The effects of economies of scale as injection rate increases

The scatter diagram above shows also that there is considerable variation in the costs depending on the case. This feature is illustrated better in the figure below, which uses the same results in a different way. It shows the costs for the base cases as a line and the potential variation in costs as vertical bars. It is clear that the rate of CO2 injection has a significant bearing on costs.

Variation in cost with changing injection rate

The diagram shows that even with injection rate variations, a significant number of cases have costs less than US$20 per tonne.

We have calculated the average cost1 across all cases and for each economy. The average across all cases is approximately US$5 per tonne of CO2-e avoided. This is cheaper than all but two of the individual cases because those two cases comprise 80% of all CO2-e avoided in our analyses. According to our analyses, CO2 storage in the selected basins in Indonesia has the lowest average cost at US$4 per tonne of CO2-e avoided. Storage in the selected basins in Vietnam is the most expensive with an estimated average cost of US$18 per tonne avoided.

1 This is a simple average across the individual representative discoveries considered. We do not weight the average by the total resource in each formation.