Tuesday, December 16, 2008

Algeria's Carbon-Capture Experiment

Algerias Carbon-Capture Experiment

About 700 miles south of Algiers, the capital of Algeria, a monumental assemblage of pipes and cylinders rises from the bleak Sahara Desert. Not far away is a small airstrip and helicopter pad. And in a compound down the road, surrounded by a thick stand of trees to break the whistling winds, there are dormitories, tennis courts, even a mess hall, where a crew of chefs whips up hearty meals including lobster pie and potato tarts for several hundred people.

In a way, this oil industry camp represents an effort to turn the desert—or at least the natural gas Algeria exports to Europe—green. The plant, which is situated on a tiny oasis known as Krechba, is designed to strip out and cleanly dispose of the carbon dioxide contained in the gas produced by a vast network of seven distinct fields below the desert floor.

The gas in this part of gas-rich Algeria contains about 7% CO2, on average. That contaminant level must be reduced to about 0.3% before it is exported to Italy and other European countries. In the past, energy companies vented such unwanted CO2 into the atmosphere, adding to the greenhouse gas problem. But in this case, the partners, Sonatrach, the national oil and gas company, BP (BP), and, Norway's Statoil (STO) decided in the late 1990s to store the carbon dioxide underground.

Executives at the site say that the In Salah Gas Project, named for an oasis about 100 miles to the south, is the largest so-called carbon, capture and storage venture in existence. Accounting for about 12% of Algeria's gas output, it is an experiment—but a very large-scale and profitable one. Including military units intended to deter attacks by Islamic militants, who are still a serious threat in Algeria, there are some 2,000 people working on the vast undertaking.

Oil Industry Visitors

The companies say their project, which will produce gas for roughly 25 years, is preventing about 800,000 tons of CO2 from going into the atmosphere annually. That's comparable to taking 200,000 cars off the road, they say. While there are difficulties and questions, it looks like a promising step in the effort to reduce CO2 emissions from one large source: the oil and gas industry. Although not highly publicized, In Salah attracts visitors from within the industry who want to see if there are any lessons they can learn for their own oil and gas fields. Recent guests included a group from Abu Dhabi National Oil.

The added cost of disposing of the CO2 isn't huge. Mohamed Keddam, a Sonatrach executive who serves as vice-president of In Salah Gas, put the price tag at $100 million out of an overall $4 billion investment, or about 2.5%. That doesn't include daily operating costs. When the partners decided to move ahead with In Salah in the late 1990s, they were attracted by the opportunity to experiment with a new, possibly environmentally friendly technology. "We didn't feel it was right to vent the CO2 if we could do something else with it," says Michael Mossman, a BP executive who is also president of In Salah Gas.

Once the methane is purified at the Krechba plant to export-quality grade, it heads north in a buried export pipeline to join the Algerian gas network. The captured CO2 is pressurized by two giant compressors supplied by Mitsubishi Heavy Industries.

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