CCS Projects Integration Workshop - London 3Nov11 - ROAD - CCS project integration from a project management perspective


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This presentation was given at the Global CCS Institute/CSLF meeting on CCS Project Integration that was held in London on 3 November 2011. The aim of the meeting was to share experiences on CCS project integration; and to identify priority integration topics that need further attention to facilitate CCS project development and deployment.
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CCS Projects Integration Workshop - London 3Nov11 - ROAD - CCS project integration from a project management perspective

  1. 1. CCS project integrationfrom a project management perspectiveGerbert van der WeijdeGlobal CCS Institute / CSLF meeting on project integrationLondon, November 2011
  2. 2. Contents• Introduction ROAD• The importance of front-end loading• Status ROAD Project at end of define phase• Experiences from the ROAD project: reflecting on the framework• Recommendations Page 2
  3. 3. MPP3 locationCapture Location: Maasvlakte Power Plant 3 • Output: 1070 MWe • Efficiency: 46% • Operational: end 2012 • Capture ready Page 3
  4. 4. CO2 Capture Unit • Technology: post-combustion • Size: 250 MW equivalent • Capture rate: 90% • CO2 capture: 1.1 mln tonne/yr • Operational: 2015 Page 4
  5. 5. CO2 Transport • Pipeline length: 5km onshore, 20km offshore • Diameter: 16” • Capacity: • 1.5 mln tonne / year (gaseous) • 5 mln tonne / year (dense) • Design specs: 175 bar, 80 oC • Pipeline insulated Page 5
  6. 6. CO2 Storage Location • Depleted gas reservoir P18 • Operator: TAQA • Depth: 3,500 m • Capacity: 35 mln tonne • Available: 2014 • Alternatives / future expansion options are being investigated (EOR) Page 6
  7. 7. Co-operating Partners ROAD• Maasvlakte CCS Project C.V. is a joint venture of: • E.ON Benelux • Electrabel Nederland (GDF SUEZ Group)• In co-operation with intended partners: • TAQA Energy • GDF SUEZ E&P• With financial support of: • European Commission (EU) • Government of the Netherlands • Global CCS Institute Page 7
  8. 8. Time Path and Milestones14 July 2009 : EU project proposal submissionSeptember 2009 : Project selection by EUMay 2010 : Grant decision by Government of the NetherlandsSeptember 2010 : Publication starting note Environmental Impact AssessmentQ2 2011 : EIA and permit proceduresQ4 2011 : Final Investment Decision2014 : CCS chain mechanically complete2015 : Integrated CCS chain operational2015-2019 : Demonstration phase CCS chain2020 : Start commercial operation Page 8
  9. 9. The Importance of Front-End Loading [1/3]• Front-end of a project: phases of the project leading up to the final investment decision (FID) FID Appraise (FED1) Select (FED2) Define (FED3) Execute Operate Front-End Development• Front-end loading (FEL): “Investing significantly in the front-end development (FED) of a project”• Front-end loading widely recognized as essential for eventual project success Page 9
  10. 10. The Importance of Front-End Loading [2/3] Goal of front-end development Developing sufficiently complete image of the project, enabling owner to decide to commit resources and address risks To be developed during front-end development • Definition of business needs & objectives Why? • Concrete path chosen to meet these objectives What? • Definition of project objectives Where? • Scope • Definition of design basis When? • Execution planning How? • Project risk analysis • Definition of required resources (financial / organizational) Who? Page 10
  11. 11. The Importance of Front-End Loading [3/3]Flexibility early in the project should be used to…• Create vision on the project• Take into account stakeholder interests• Define an effective strategy to deliver a valuable project• Maximize use of opportunities to create value Maximum value for the business Minimum need for costly and time consuming changes after FIDDuring the front-end development of a project…• Use a structured stage-gate process• Apply value improving practices• Build an integrated project team which is aligned around common goals Page 11
  12. 12. CCS Project Development Framework Page 12
  13. 13. Status ROAD Project at end of define phase [1/3]Activity ROAD status during ‘define’ phaseProject Context and Opportunity Board Paper (incl. project status, strategic fit, organizational setup, costs &Definition and Recommendation financial metrics, risks & risk mitigation, procurement, permitting, stakeholder management, execution planning) available.Project Development Approach Project execution plans in place. Site selection not applicable for ROAD (MPP3 already under construction).Site Selection Soil investigation performed. Leasehold ready for signature.Stakeholder and External Stakeholder management plan & team in place.Relations Public engagement activities ongoing. Environmental studies completed.Environment Environmental Impact Assessment submitted to competent authorities. Permit applications submitted. Several risk assessments completed, including HAZID, HAZOP, maximum credible accident study and reliability assessment. A rough outline of timing of finalizing different H&S systems and documentsHealth and Safety has been prepared. A safety management team for construction and commissioning is still to be established, as are detailed procedures on site surveys. However, coordination risks on site are being investigated. Page 13
  14. 14. Status ROAD Project at end of define phase [2/3]Activity ROAD status during ‘define’ phaseFuel Supply Not applicable for ROAD (E.ON MPP3 scope). Power plant engineering not applicable (E.ON MPP3 scope). FEED study capture plant completed.Power Plant – Capture Facility Value engineering capture plant completed. Detailed engineering started. Basic design interfaces completed. CO2 specification is fixed, including impurities, pressures and temperaturesCO2 Product Compressor and dehydration process and design has been assessed in FEED CO2 transport pipeline has been specifiedInfrastructure Not applicable for ROAD (E.ON MPP3 scope).Project Delivery EPC contract capture plant supplier ready for signature. Contract with storage partner ready for signature.Capital / Operating Costs Cost estimates (+/- 10-15%) available.Operations Investigation performed on location of control room, combine with MPP3 or separate. Operation will be possible from both locationsRevenue and Trading (CO2 Utilities agreement (incl. power, steam and utilities supply, ETSProduct Only) compensation, operating/dispatch principles) with E.ON in place. Page 14
  15. 15. Status ROAD Project at end of define phase [3/3]Activity ROAD status during ‘define’ phaseManagement Systems Allocation of the responsibilities along the entire CCS chain agreed. Partner agreements ready for signature.Ownership and Legal Project ownership and governance structure in place.IP Management IP system has been set up to share info on E.ON power plant with ROAD IP of capture supplier covered in EPC contract and license agreement.Financial Analysis Detailed discounted cash-flow model in place. Risk workshops held with all disciplines in project team.Risk Risk register (incl. cost/schedule impact, mitigating measures, residual risk) in place.Funding Funding agreements with European Commission, Government of the Netherlands and Global CCS Institute in place.Future Work Plan Project execution plans in place.Status of Studies Various technical studies on all parts of the CCS value chain completed. Pre-FID project review by specialized GDF SUEZ subsidiary performed. Page 15
  16. 16. Experiences from the ROAD project: [1/3]reflecting on the frameworkROAD “skipped” parts of identify / evaluate stage, e.g.:• E.ON and GDF SUEZ power plants at Maasvlakte under construction• Dutch political pressure against unabated coal Strong push to demonstrate CCS at Maasvlakte; no site selection capture Retrofit only technical option for capture• P18 fields, suitable for CO2 storage, operated by TAQA, nearby• TAQA developing Bergermeer gas storage project (permitting) P18 selected: lowest cost solution with supportive partnerDifferent business drivers and local circumstances different development approach / FED activities Page 16
  17. 17. Experiences from the ROAD project: [2/3]reflecting on the frameworkStrong tension between resolving key issues (funding, permits, sink), andmanaging cost and schedule, e.g.:• Ideal approach would be to first secure sink and only then do capture FEED• EEPR funding: costs over period of 5 years eligible and operation by 2015 required No time to first secure sink and only then start with capture FEED• At this point in time (various capture technologies, environmental scrutiny), supplier selection has to be made before permit application• Selecting capture supplier releases competitive pressure and increases cost (risk)Tension between key issues, cost and schedule challenge to sequence FED activities to achieve optimum result Page 17
  18. 18. Experiences from the ROAD project: [3/3]reflecting on the framework• CCS Project Development Framework: required steps, logical sequence• However: individual CCS projects face unique circumstances that make direct application of the framework difficult• Challenge: how to make the framework customizable for individual projects? • Which activities are required? • In which sequence should activities be performed? Page 18
  19. 19. Recommendations• Using the CCS Project Development Framework...• Base development approach on business drivers and local circumstances• Focus front-end development on what is required at FID, e.g.: • Funding, permits, sink to be secured • Capture (highest cost, after FID on critical path) Contracts “ready for signature” Engineer for high cost certainty • Transport (costs project dependent but good price indices, little engineering) Engineer for permits, focus on special points (e.g. shipping lane crossings) • Storage (low costs, several technical critical issues) Tackle critical issues (secure? volume? injectivity? commercial conditions?) Engineer for permits, not for cost certainty Page 19
  20. 20. Maasvlakte CCS Project C.V.Parallelweg 13112 NA Page 20