Knowledge Sharing Conference
ERIA and Stella Maris Impart Expertise in Developing Stella Maris Project to Advance CCUS in Asia
The 16th Knowledge Sharing Conference, 23 August 2024: With significant carbon dioxide (CO2) storage potential in several Southeast Asian countries and climate goals that must be achieved, the race is on to establish a Carbon, Capture, Utilisation, and Storage (CCUS) hub in the region. Amidst the push to meet emissions reduction targets swiftly and effectively, scaling up CCUS and Carbon, Capture, and Storage (CCS) projects will be essential to reducing the cost of these carbon removal technologies. Countries in Asia must overcome several challenges, including regulatory frameworks, financing, and suitable business models, to advance these regional projects while ensuring a robust CCUS value chain is developed. The Economic Research Institute for ASEAN and East Asia (ERIA), as the secretariat for the Asia CCUS Network (ACN), invited Altera Infrastructure to share their expertise and insights on their Stella Maris CCS project, a large-scale and scalable CO2 capture solution during the 16th ACN Knowledge Sharing Conference, entitled “Developing CCUS Hub in Asia: Lesson Learned from Stella Maris CCS System.” The event focused on the opportunities, obstacles, and solutions of establishing cross-border CCUS hubs of which there are currently two in the world: the Northern Lights System and the Stella Maris System.
The Stella Maris is a joint project by Altera Infrastructure and Höegh LNG and is designed to address CCUS project-related issues such as high capture and logistics costs. It is a purely commercial project in which the project developers did not receive any governmental financial support. The technical concept selection started in 2021 through a range of Norwegian research grant applications and in 2023, the company was awarded a reservoir license in Norway. The first commercial injection by Stella Maris is expected by 2028. The project is set to include up to three carbon collection storage units, up to four CO2 shuttle carriers, floating storage, and injection units; altogether, the Stella Maris can receive nearly 10 million tonnes (MT) of CO2 per year. The Stella Maris CCS project could also be replicated to accelerate CCUS hub development.
Mr Shigeru Kimura, Special Advisor to the President on Energy Affairs, ERIA outlined the importance of the CCUS value chain ‘to connect the country that emits the CO2 and the country that stores the CO2’ in his Opening Remarks. The transportation of CO2, either by ship or pipeline, as well as its storage in saline aquifers, is essential for a streamlined CCUS value chain. As such, legal frameworks including government-to-government agreements and the London Protocol are required and must be upheld. Furthermore, future studies on the certification of CO2 storage and storage price, including transportation via shipping and pipeline, are necessary to better understand the methods of becoming a CCUS regional hub. Mr Kimura shared plans to invite Japan to an upcoming knowledge sharing event following a recent update whereby CO2 from a coal-fired power plant was transported to and stored in Tomakomai, Hokkaido.
Before introducing the event speakers and opening the Presentation Session, event moderator, Dr Gusti Sidemen, CCUS Research Fellow, ERIA, explained how the latest knowledge sharing conference is part of ACN’s programme ‘to support CCUS development in Asia to achieve net-zero community by 2050 or 2060.’ Two speakers were invited to deliver their presentation, namely Ronald Chew, New Business Development, Carbon Capture and Storage, Altera Infrastructure and Mr Frank Wettland, CCS Project Manager, Altera Infrastructure. Mr Chew provided the general details of Altera Infrastructure and the Stella Maris project while Mr Wettland explained the technical details of the CCS project. Altera Infrastructure was formerly known as TeeKay Offshore, a leading company within oil and gas production on FPSO and FSO with over 40 years of experience. Mr Chew shared, ‘Entering the energy transition phase, Altera’s ambition is to become a global carbon management company, representing a one-stop-shop supplier to the emitters – covering the entire value chain from the CO2 collection to permanent storage in our subsurface reservoir.’ Altera Infrastructure is owned by Canadian multinational company, Brookfield, in which the company has raised over $15 billion for its energy transition fund called the Global Transition Fund. The investment fund will focus on infrastructure strategy and growth equity in areas ‘such as emissions reduction, emissions avoidance worldwide, and in what we call the hardest-to-abate sectors in power, industrials, transport, and energy sectors.’
Based on the International Energy Agency’s (IEA) ‘Energy Technology Perspectives 2020’ report, CCS is listed as one of four key pillars of the global energy transition, alongside bioenergy, hydrogen, and renewables-based electrification. Mr Chew explained, ‘The IEA predicts that the contribution of CCS to emissions reduction will grow over time as CCS technology progresses, and costs will drop, and the abatement options are exhausted.’ He emphasised that achieving the level of CCS deployment and research in the projected decarbonisation pathways underscores the importance of ‘deliberate development and planning’ of CCS in parallel with supporting policies and mechanisms. Currently, the European Union’s (EU) Emissions Trading Scheme (ETS) serves as a strong business case for CCS development in which European carbon reaches €100 per tonne of CO2 and is projected to reach up to €300 per tonne of CO2 in the coming years. The EU ETS operates on a cap-and-trade principle and, according to Mr Chew, this will be the key to incentivising investment in large-scale mitigation solutions, such as CCS.
In offering CCS carbon management services and developing a business case centred around commercialising Altera’s CO2 sequestration site in the Norwegian North Sea sector, the Stella Maris team has selected three primary cross-border hubs:
- Central Hub; emitters in Germany, Belgium, and the Netherlands
- North Hub; emitters in Sweden and the Baltics
- South Hub; emitters in Portugal and Spain
To deepen CCS adoption in the EU, shared access to CCS infrastructure is integral to connecting the European hubs to the Norwegian sequestration site. This measure will ‘bring large-scale solution and cost-effectiveness which will be very competitive to the current cost of emissions in the EU.’ The Stella Maris service will serve as a single contractual interface with the emitter and will be negotiated based on a per-tonne basis. According to Mr Chew, Altera Infrastructure has garnered strong commitments from large emitters in Europe amounting to a collective demand of nearly 20 MT of CO2 annually.
Furthermore, Southeast Asia and Australia have moved ahead with multiple CCS developments. Petros in Malaysia recently launched a bid to three storage sites to develop the CCUS industry in Sarawak. Malaysia’s Petronas has its flagship Kasawari CCS project to process high-CO2 natural gas production, meanwhile, in Australia, Santos is collaborating with the East Timor government ‘to develop the first merchant CCS scheme regionally’ for its Bayu Undan CCS project. In Singapore, ExxonMobil and Shell are striving to develop a CCS hub called the ‘S-Hub’ consortium focusing on the country’s industrial emissions. Indonesia’s Ministry of Energy and Mineral Resources shared their commitment to launching 15 CCS/CCUS projects in the next five years and welcomed collaboration between global oil and gas production giants. Mr Chew expressed Altera Infrastructure’s readiness to impart the company’s experience and knowledge of developing CCS to the Asia region.
Mr Frank Wettland, CCS Project Manager, Altera Infrastructure presented in-depth information on the Stella Maris CCS project. When the project started in 2019, there were already several pipeline-based projects which existed in Europe, including the Northern Lights and Porthos projects, however, they all had relatively low capacities. Altera Infrastructure opted for a large-scale concept hence the company’s CCS value chain has been designed to handle up to 10 MT of CO2 per year for injection. Mr Wettland stated, ‘We want to have full control of the value chain so that we’re able to set a one-stop-shop contract with the emitters so that the emitters are delivering the CO2 to us at the terminal, and we take care of the rest.’
The system operates such that large volumes of CO2 at shore are picked up, transported, collected, and directly injected into a reservoir offshore. The Stella Maris system will feature a collection terminal ‘which can be onshore or offshore as a floating installation depending on local conditions,’ offshore transport, and offshore injection. Large shuttle carriers of around 50,000 cubic metres (cbm) per ship will serve as the transportation in which Altera Infrastructure is working with Samsung to develop its ships. The company aims to have a fleet of shuttle tankers to avoid delays or potential problems that could affect CO2 supply. The offshore injection unit will directly inject CO2 into an underground source in the Havstjerne reservoir, a saline aquifer, close to the Danish border. The Havstjerne is a reservoir without any hydrocarbon, making it a safe place to store CO2, and it has a good capacity that can take in 8-10 MT of CO2 annually. Altera Infrastructure will share the reservoir with the oil and gas company, Wintershall Dea, and plans for operations at the site are set for the end of 2028.
Maritime solutions offer greater flexibility that cannot be achieved with pipelines as they can be scaled up or down based on the market development, thus, ‘we can take this solution wherever we want in the world.’ The Stella Maris solution is highly scalable and makes it possible to add or repurpose ships, collection terminals, and injection facilities to be able to meet the sequestration demand. Systems like the Stella Maris are also scalable in capacity in which the injection units can be adjusted, and the offshore transportation fleet can serve multiple injection locations. A noteworthy aspect of the Stella Maris system is that the company ‘can receive any quality of CO2, depending on what fits the emitter best, and it can either come by car, train, or low-pressure or high-pressure pipelines into the terminal.’ Mr Wettland stated that receiving different CO2 quality would make it ‘as easy as possible for the emitter’ and would allow the collection of ‘larger volumes of CO2 so that also minor emitters can be part of a large-scale value chain contract.’ Through this setup, the emitter only pays for the quantities added to the terminal and not for the entire shipment hence reducing the unit price for the emitter. Further, this will enable Altera Infrastructure to have clusters or multiple emitters. The CO2 will then be purified and processed up to the specifications determined for the shuttle carriers.
The Stella Maris CCS value chain begins with the CO2 Terminal which will be a floating barge designed to receive and process high- and low-pressure gas from pipelines, medium- and low-pressure liquid from roads, ships, or barges, and various qualities with different levels of impurities. Mr Wettland explained that the company can establish terminal facilities and intermediate storage on land as well, thus, providing flexibility if the market develops. Further, the ships will have a capacity of 50,000 cbm and the intermediate storage capacity will be around 70,000 – 80,000 cbm of liquid CO2; the capacity of Stella Maris’ e-shuttle tankers is seven times the load of the Northern Light ships, helping to lower transportation costs.
The offloading process will be directly offshore, and continuous injection is ensured as one carrier will always be at the site. Mr Wettland stated, ‘It is only a pumping station for pumping up the pressure and getting the temperature to where we need.’ On the other hand, Altera offers two options as the direct injection unit, either as a floating unit for deep waters or a fixed unit for areas with shallow waters. The unit will feature a fixed jacket structure and will be an unmanned station where the operation control centre will be onshore.
During the Open Discussion session, a question was raised about the reasoning behind Altera’s decision to receive various CO2 qualities. Mr Wettland stipulated, ‘The whole idea with the terminal is to gather CO2 from the multiple emitters in a geographical cluster so that multiple emitters can be part of a large-scale contract.’ Moreover, it would be less costly to ship liquid CO2 of varying qualities and have it processed in a common terminal rather than having each emitter supply high-grade quality CO2. There will only be a small difference in the tariff depending on the CO2 composition although the business principle remains the same, which is to ensure that it is advantageous for the emitter to send the CO2 with Stella Maris than releasing it into the atmosphere. At the terminal, the CO2 will undergo purification and liquefaction if it is received in gas form. Mr Wettland explained, ‘The point of the terminal is to let minor emitters come together and get the advantages of a large-scale transport value chain downstream.’
On the question concerning the storage reservoir, Mr Wettland stated that, under the 10MT of CO2 per year scenario in full production, approximately 15 megawatts (MW) of power will be needed; the required power will be produced on the shuttle carrier as it is already installed on the ships. Mr Wettland shared that the power is only needed for the cargo pump, heating, and lighting on the ships. Given that the reservoir is a robust saline aquifer, pumping out water is not necessary to ensure an easier injection as the pressure will slowly distribute in the aquifer. Concerning a question on cross-border agreements, Mr Wettland emphasised that the issue must be arranged between individual countries and not between companies.
Regarding liability, Mr Wettland clarified that the project developers or owners of the terminal are liable for the CO2. He added, ‘If we own the terminal, your liability as an emitter is released when we take over the CO2 at the terminal or the ship, and we take full responsibility after that.’ In cases of a CO2 leak, the project developers will bear the cost required to pay for the CO2 tax. As such, saline aquifers are preferred as the reservoir type given that there are no existing leakage points compared to depleted oil and gas fields. Mr Wettland stipulated, ‘The cement that is used to plug the oil and gas wells is not prepared for CO2 and that will be a problem in the years to come.’ When the Havstjerne reservoir shuts down in the future, Altera and its partner are responsible and liable for the next 20 years which they then have the option to transfer to the Norwegian authorities. ‘For CO2 the risk is very low so that should be handled very well, and we had many discussions with the insurance companies to handle these situations, but it’s a solvable situation,’ Mr Wettland explained.
Dr Han Phoumin, Senior Energy Economist, ERIA enthusiastically welcomed the Stella Maris business model as it is ‘quite simple than what we believe.’ With the project ready in terms of regulations and technical aspects, the ACN seeks to remain updated on the progress of the Stella Maris CCS project. Dr Phoumin concluded his speech by underscoring the objective of the knowledge sharing conference ‘to ensure that the technology is transferred and that the region of Southeast Asia can get the project going and commercialise CCUS.’
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