B.1 Asset Lifecycle Model

The Asset Lifecycle Model represents the various stages in the development of a project, small or large, as it moves through planning, design, construction, operation and closure. There are different systems available to define project stages, sometimes using different terminology, but all effectively use a similar lifecycle model. This framework (Figure B1) reflects the decision points in a project lifecycle where developers either decide to continue to commit resources to refine the project further (gateways) or assess that future benefits will not cover the expected costs.

FIGURE B1 Asset Lifecycle Model

Source: from Worley. Parsons 2009, modified by Global CCS Institute.

A project is considered in ‘planning’ when it is in the Identify, Evaluate or Define stages and is considered ‘active’ if it has made a positive FID and has entered construction (Execute stage) or is in operation (Operate stage). As a project progresses through each stage, the level of definition increases with an improved understanding of the scope, cost, risk and schedule of the project. This approach reduces the uncertainty surrounding the project while managing upfront development costs.

In the Identify stage, a proponent carries out early studies and preliminary comparisons of alternatives to determine the business viability of the broad project concept. For example, an oil and gas company believes that it could take concentrated CO2 from one of its natural gas processing facilities and inject and store the CO2 to increase oil production at one of its existing facilities. To start the process the company would conduct preliminary desktop analysis of both the surface and subsurface requirements of the project to determine if the overall project concept seemed viable and attractive. It is important that the Identify stage considers all relevant aspects of the project (stakeholder management, project delivery, regulatory approvals and infrastructure as well as physical carbon capture and storage facilities). Before progressing to the Evaluate stage, all the project options that meet the overall concept should be clearly identified.

In the Evaluate stage, the broad project concept is built upon by exploring the range of possible options that could be employed. For the oil and gas company this would involve exploring:

  • which of its facilities, and possibly even facilities of other companies, might be best placed to provide the concentrated CO2 for the project;
  • possible pipeline routes that could be utilised from each of these sites and even alternative transport options such as shipping if relevant; and
  • which oil production field is suitable for CO2 injection based on its proximity to the concentrated CO2, the stage of oil production at the field and other site factors.

For each option the costs, benefits, risks and opportunities would be identified. The Evaluate stage must continue to consider, for each option, all relevant aspects of the project (stakeholder management, project delivery, regulatory approvals, infrastructure as well as physical carbon capture and storage facilities). At the end of this stage, the preferred option is selected and becomes the subject of the Define stage. The preferred option must be sufficiently defined. No further key options are to be studied in the Define stage.

In the Define stage, the selected option is investigated in greater detail by carrying out feasibility studies and preliminary FEED. For the oil and gas company this would involve determining the specific technology to be used, the design and overall costs for the project, the permits and approvals required and the key risks to the project. In addition, it involves undertaking a range of activities such as focused stakeholder engagement processes, seeking out finance or funding opportunities and tendering for and selecting an engineering, procurement and contracting supplier.

At the end of the Define stage, the level of project definition must be sufficient to allow for a FID to be made. The level of confidence in costing estimates should be ±10–15 per cent for overall project capital costs and ±5–10 per cent for project operating costs. Collectively, the Identify, Evaluate and Define stages can take between 4–7 years. Development costs to reach a FID can be in the order of 10–15 per cent of overall project capital cost depending on the size, industry and complexity of the project.

In the Execute stage, the detailed engineering design is finalised. The construction and commissioning of the plant occurs and the organisation to operate the facility is established. Once completed, the project then moves into the Operate stage.

In the Operate stage, the CCS asset is operated within regulatory requirements and maintained and, where needed, modified to improve performance.

In the Closure stage, the CCS asset is decommissioned to comply with regulatory requirements. The site is rehabilitated for future defined use and resources are allocated to manage post-closure responsibilities.