The document summarizes a study on the costs of potential carbon capture and storage (CCS) networks in the Netherlands and Belgium. It describes 6 potential transportation and storage scenarios that were modeled, including shipping CO2 via tankers or pipelines to offshore storage sites. The financial model analyzed the capital and operating costs of each infrastructure component, such as pipelines, and calculated overall costs to emitters. The results identified the most cost-effective transportation and storage options and key cost drivers to inform CCS project planning.

1. Transport and storage economics of
CCS networks in The Netherlands
Webinar – 4 June 2013, 1730 AEST

2. Ernst Menten
 Ernst is a Project Manager for Deltalinqs Energy Forum and has been
involved in the field of CCS since 2010.
 In this role, he has been the RCI’s project leader for this study on CO2
Transport and Storage Economics of CCS Networks in the Netherlands
(2012) as well as for the Independent Storage Assessment (2010-2011),
which identified the most appropriate short and long-term CO2 storage
options in the Dutch Continental Shelf.
 Ernst holds degrees in Environmental & Medical Biology and has had a
long career in the field of climate change mitigation.
Rotterdam Climate Initiative / Deltalinqs

3. Tatiana Zervos
 Tatiana is a Project Manager in the Clean Energy team at the Clinton
Climate Initiative, focusing primarily on CCS in Europe and China.
 Under CCI’s Memorandum of Understanding with the Rotterdam Climate
Initiative, she has been advising the RCI and working closely with all major
emitters considering CCS projects in the Netherlands towards the planning
of a CCS network and has led the financial modelling for this report.
 She is also involved in CCS and more general climate finance issues
including through the CCUS Action Group and the UK’s Capital Markets
Climate Initiative.
 Tatiana holds an MA in Economics and Management from the University of
Oxford and prior to joining CCI in 2010, was an Associate in the Investment
Banking division at BofA Merrill Lynch in London.
Clean Energy, Clinton Climate Initiative

4. Daniël Loeve
 Daniël is a Research Scientist for the Petroleum Geosciences team at
TNO.
 He has been working in the E&P industry for five years and has a particular
interest in reservoir engineering, assisted history matching and CO2
storage.
 He is involved in several European projects (e.g ECCO, COCATE,
SITECHAR) and national studies (CATO2) related to CO2 storage and
transport. These studies include storage capacity estimation, CO2
monitoring and related chemical and geo-mechanical analyses.
 Daniel was a member of the developer team of the ECCO tool, which is an
economic evaluation tool of CO2 storage projects. Specifically, Daniel was
responsible for the cost estimates and the modeling of the different CCS
infrastructure in the North Sea built into the ECCO tool.
Petroleum Geosciences, TNO

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6. TRANSPORT AND STORAGE ECONOMICS OF CCS NETWORKS
Global CCS Institute Webinar
4 June 2013
Contributors
• Rotterdam Climate Initiative
• CATO-2
• Stichting Borg
• Antwerp Portauthority
• Shell
• Global CCS Institute
Project Delivery Team
• Rotterdam Climate Initiative - Ernst Menten (Deltalinqs)
• Clinton Climate Initiative (CCI) - Tatiana Zervos
• CATO-2
• TNO - Daniël Loeve, Filip Neele
• ECOFYS - Chris Hendriks, Joris Koornneef

7. AGENDA
• OBJECTIVES AND ORGANISATION
• SCENARIOS, DATA COLLECTION AND COSTING
• FINANCIAL MODEL
• KEY TAKEAWAYS
• Q&A
7

8. OBJECTIVES AND ORGANISATION
8

9. TRANSPORT AND STORAGE ECONOMICS OF CCS
NETWORKS IN THE NETHERLANDS AND ANTWERP
Objectives & Organisation
9
• We saw that a number of industry-led initiatives were planning for large scale demonstration projects
• Businesses developed a vision for commercial deployment of CO2-transport based on common-user
networks, including other regions
• Second round NER 300 was in planning so companies needed to take short term and high level
decisions on design and specifications of CO2 offtake infrastructure
• Opportunity to collectively evaluate alternative pathways because of the existence of the ISA Steering
Group represents all major emitters most committed to exploring the potential of CCS on a commercial
basis and is best placed to drive credible analysis
• Provide a “planning tool” (excel-based), allowing Steering Group members, and CCS developers in
general, to form a common view of the costs and risks drivers of CO2 transport and storage options on a
shared basis
• Identify near-term actions to enhance the feasibility of CCS projects and facilitate the necessary
strategic and commercial discussions with one another and external parties, including government
and transport and storage operators
RATIONALE
for the
PROJECT
OBJECTIVE
S

10. PROJECT ORGANISATION
Objectives & Organisation
10
1
• Developed based on offshore storage options most likely to support capture projects in the short (2015) and
medium (2020+) term. Both ship and pipeline transport considered
• Phase 1: Dutch Continental Shelf (P18, P15, Q1) and EOR opportunity in Denmark – NL emitters
• Phase 2: Q1, UK (CNS, Captain Sandstone) and Norway (Utsira) – NL & Antwerp emitters
DEFINITION of T&S
SCENARIOS
(SG, RCI/CCI)
• Existing publicly available information, as well as direct input from project developers
• Detailed injection profiles developed for all storage options (exc. EOR)
• Technical parameters (e.g.: routes, dimensions, pressure requirements) and cost inputs integrated into
ECCO tool to produce detailed cost timeseries
DATA COLLECTION &
COSTING
(CATO-2)
• Fully dynamic, excel-based discounted cash flow (DCF) model
• Integrates CAPEX and OPEX timeseries produced by the ECCO tool for each scenario
• Determines overall cost and risk/reward profile of each scenario, given certain changeable assumptions
CONFIDENTIAL
FINANCIAL MODEL
(CCI)
• Aim to identify the most important cost drivers
• Base case results (total and per unit costs to the user emitters, cash flows and resulting rates of return for
operators) and sensitivities on isolated cost drivers (e.g.: capture scenarios, financing mix/cost)
RESULTS &
CONCLUSIONS (ALL)
• Knowledge sharing report and public model for the benefit of other regions considering CCS networks
• Engagement with key stakeholders (e.g.: government and potential operators) on the conclusions,
implications and strategic questions raised by the analysis
KNOWLEDGE
SHARING &
ENGAGEMENT (ALL)
2
3
4
5

11. SCENARIOS, DATA COLLECTION AND COSTING
11

12. OVERVIEW OF TRANSPORT AND STORAGE SCENARIOS
12
[ ] Storage Option Type & Capacity Off. Transport CO2 Sources Rationale
P18 / P15 (NL)
Dep. Gas Field
~79MtCO2
Pipeline Rotterdam
Under consideration by the ROAD and Green Hydrogen
projects in the Netherlands
Dan Oilfield EOR
(D)
Dep. Oil Field Shipping
Rotterdam FS
Eemshaven FS
Under consideration by the Green Hydrogen project in
the Netherlands
Q1 (NL)
Aquifer
~200MtCO2
Pipeline
Shipping
Rotterdam FS
Eemshaven
Antwerp
Most promising medium term site in the Dutch
Continental Shelf as per ISA Phase 3 and EBN/
Gasunie
Bunter Aquifer
(South. North
Sea, UK)
Aquifer
[>2,000MtCO2]
Pipeline
Shipping
Rotterdam FS
Antwerp
UK
Likely storage option for future CCS projects in the
Yorkshire and Humber area
Captain
Sandstone
Aquifer (UK)
Aquifer
[>360MtCO2]
Shipping
Pipeline
Rotterdam FS
Antwerp
Eemshaven FS
UK
Identified as one of the most promising CO2 storage
sites in the Northern North Sea by CCS stakeholders in
Scotland
Utsira Sandstone
(NO)
Aquifer
[>20Gt]
Shipping
Eemshaven FS
Other North Sea
Currently used for storage of CO2 separated from
natural gas produced at the Sleipner field
Phase1Phase2
Scenarios, Data Collection &
Costing

13. MODE OF TRANSPORT AND ROUTE SELECTION
Scenarios, Data Collection &
Costing
13
YH Hub
UK SNS Aquifer
Selby
Pipeline from
Rotterdam
and Antwerp
Bunter
(Southern
North Sea)
• What is the most efficient type of transport to the UK?
• In defining the scenarios we had to find an answer to these type of questions. This was done with the help of
the ECCO Tool

14. SHIPPING VS. PIPELINE COSTS
Scenarios, Data Collection &
Costing
14
Shipping is especially
cost effective for
longer distances
Shipping is also more
cost effective for
shorter distances,
given smaller CO2
volumes transported

15. • Once the design of each scenario was set, the next step was to break down the transport and storage infrastructure into
segments, determine the technical parameters, identify and collect any missing data and calculate the costs
(Onshore ~82km; 1MtCO2/yr)
Shipping
(~256km)
Q1 Aquifer
(200MtCO2)
New offshore pipeline
(~110km, 10MtCO2/yr)
Shipping in demo phase and pipeline in full scale
(~219km, 5MtCO2/yr)
RTM
Hub
(1km; 4.5MtCO2/yr)
(1km; 4.5MtCO2/yr)
Onshore RTM
Collection Network
(~33km)
ANTWERP
Demos High
Ship
Terminal
ROTTERDAM
EEMSHAVEN
A
B
AN EXAMPLE SCENARIO – INTRODUCING CHAIN UNITS
Scenarios, Data Collection &
Costing
15
Rotterdam FS #1
Rotterdam FS #2
North Netherlands #1
Demo & FS
North Netherlands #2
Demo & FS

16. DATA COLLECTION AND COST PREPARATION
Scenarios, Data Collection &
Costing
16
• The CATO team collected and reviewed all relevant existing data from public sources and confidential reports
available to the SG (e.g. ISA I, II, III ). The team also held one-on-one meetings with certain SG members and other
participants to clarify questions.
• The technical parameters (e.g.: routes and dimensions, pressure requirements etc.) and associated headline costs for each
of the scenarios were then incorporated into the ECCO Tool to develop CAPEX and OPEX timeseries for each chain
unit / infrastructure segment. Once available, the timeseries were integrated into the financial model.
Example of a typical ECCO Tool Input file for a pipeline chain unit.
Example of a typical ECCO Tool Output file for a
pipeline chain unit, used by the financial model
Detailed output: Pipeline_1
CAPEX Related Custom Output 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
Total Capex - - - - (32.87) (33.42) - - - -
Total costs for onshore pipelines - - - - - - - - - -
Total costs for onshore pipelines + Additional costs for offshore part- - - - - - - - - -
Default cost for pumping - - - - - - - - - -
Costs for crossing (overhead) + Umbilical - - - - - - - - - -
OPEX Related Custom Output 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
Total opex - - - - - - (0.11) (0.12) (0.12) (0.12)
Fixed opex - - - - - - (0.11) (0.12) (0.12) (0.12)
Variable opex - - - - - - - - - -
CO2 transported related output 2012-Jan 2012-Jul 2013-Jan 2013-Jul 2014-Jan 2014-Jul 2015-Jan 2015-Jul 2016-Jan 2016-Jul
CO2 transported in each period Mtonne in each period - - - - - - 0.55 0.55 0.55 0.55
Operational dates
Year when the pipeline becomes operational 2015 - - - - - - - - -
Year when the pipeline cease the operation 2020 - - - - - - - - -
CAPEX, OPEX, CO2
T/Put Timeseries & Key
operational dates
Costings &
indexation
Terrain (on/off shore), crossings, material
Size, length, pressure
Pipeline route

17. FINANCIAL MODEL
17

18. CONFIDENTIAL FINANCIAL MODEL STRUCTURE
Financial Model
18
CONFIDENTIAL FINANCIAL MODEL
(Discounted Cash Flow)
Technical Parameters
and
Cost Data
(ECCO Tool Outputs)
UNIT AND TOTAL
COSTS
OPERATOR
FINANCIAL
STATEMENTS
INDICATIVE TARIFFS
to EMITTERS
Aggregated into
Provide
Service to
Financing Assumptions
Tariff Structures
Macro Assumptions
CO2 Volumes
Timing of Operations
KEY
INPUTS
INDIVIDUAL CHAIN UNITS T&S OPERATORS EMITTERS / CO2 SOURCES
KEY
OUTPUTS

19. RTM Onshore CN
Pipelines
RTM-Q1 Offshore
Pipeline
NNL Onshore CN
Pipelines
NNL-Q1 Offshore
Pipeline
Total Throughput 121.50 MtCO2 121.50 MtCO2 67.00 MtCO2 60.00 MtCO2
Summary Cash Flow Statement (Total EURm unless otherwise stated, 2011 Basis)
Cash Flow from Operating Activities €9.1m €297.6m €22.5m €483.3m
Total CAPEX / Investing Cash Flow (€6.1m) (€181.3m) (€13.6m) (€290.0m)
Proceeds from Government Capital Grants - - - -
Proceeds from Debt 3.7 126.9 9.5 203.0
Proceeds from Equity Issuance 1.8 54.4 4.1 87.0
Cash Flow from Financing Activities €5.5m €181.3m €13.6m €290.0m
Cash Available for Debt Service €8.5m €297.6m €22.5m €483.3m
Debt Amortisation (3.0) (102.0) (7.6) (163.2)
Interest Expense Paid (1.7) (59.8) (4.5) (95.6)
Cash Available for Distribution to Equity €3.8m €135.8m €10.4m €224.4m
Cash Flows to Equity €2.0m €81.4m €6.3m €137.4m
Equity IRR 10.0000% 10.0000% 10.0000% 10.0000%
WACC 6.15% 6.15% 6.15% 6.15%
EXAMPLE MODEL OUTPUTS
SEGMENT COSTS AND FINANCIAL STATEMENTS
Financial Model
19
IS2 Total Costs
(2011 Basis)
CAPEX OPEX
Pipelines (Target RoE 10%)
RTM Onshore CN Pipes 2 2 km 10.0 MtCO2/yr 7.6 MtCO2/yr 122 MtCO2 16 €6m €7m €0.2 /tCO2
RTM-Q1 Offshore Pipe 2 110 km 10.0 MtCO2/yr 7.6 MtCO2/yr 122 MtCO2 16 €181m €11m €2.8 /tCO2
NNL Onshore CN Pipes 4 14 km 6.0 MtCO2/yr 4.5 MtCO2/yr 67 MtCO2 15 €14m €7m €0.5 /tCO2
NNL-Q1 Offshore Pipe 2 218 km 6.0 MtCO2/yr 6.0 MtCO2/yr 60 MtCO2 10 €290m €10m €9.0 /tCO2
Storage (Target RoE 13%)
Q1 Storage 7 200 MtCO2 12.4 MtCO2/yr 199 MtCO2 16 €52m €467m €2.8 /tCO2
Ships (Target RoE 10%)
NNL-Q1 Ship 3 219 km 4.5 MtCO2/yr 1.4 MtCO2/yr 7 MtCO2 5 €109m €79m €35.8 /tCO2
ANT-Q1 NL Ship 1 256 km 4.5 MtCO2/yr 1.0 MtCO2/yr 10 MtCO2 10 €109m €157m €33.3 /tCO2
IS2 #
Users Dist.
Max. Infra
Capacity
IS2 Avg
Annual T/Put
IS2 Total
T/Put
IS2 Ops
Life
IS2 Cost per
tCO2 T/Put Key parameters and costs of
transport and storage
infrastructure (operator level, i.e.:
aggregated chain units)
Detailed and summary financial
statements (profit and loss /
income statement and cash flow)
for each operator

20. Financial Model
20
€6.4 €5.6 €4.5 €4.5 €4.4
€9.4
€7.5 €7.9
€10.1 €9.2
€7.6 €7.3
€10.2
€3.8
€46.4 €46.4
€9.1
€31.7
€20.6
€34.1
€22.7
€32.2
€31.0
€20.7
€16.2
€27.3
€18.3
€11.9
-
€5 /tCO2
€10 /tCO2
€15 /tCO2
€20 /tCO2
€25 /tCO2
€30 /tCO2
€35 /tCO2
€40 /tCO2
€45 /tCO2
€50 /tCO2
S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 S14
Range of Emitter Tariffs - Phase 2 T&S Scenarios
21.5 21.0
20.6 20.1 19.6 19.1
23.4
21.8
20.0
18.1
16.2
14.1
-
€5 /tCO2
€10 /tCO2
€15 /tCO2
€20 /tCO2
€25 /tCO2
€30 /tCO2
0% 10% 20% 30% 40% 50%
Gov. Capital Grant % Total CAPEX
Total InfrastructureCostper tCO2at Increasing Gov.CapitalFinancing
IS7
IS8
13.9
17.1
21.5
26.6
32.2
10.1
15.7
23.4
32.9
46.2
-
€5 /tCO2
€10 /tCO2
€15 /tCO2
€20 /tCO2
€25 /tCO2
€30 /tCO2
€35 /tCO2
€40 /tCO2
€45 /tCO2
€50 /tCO2
(2.00%) (1.00%) - +1.00% +2.00% ∆ to Operator
WACC
Total Infrastructure Cost per tCO2 at Incremental Changes to WACC
IS7
IS8
Base Case
WACC6.15%
EXAMPLE MODEL OUTPUTS
INDICATIVE TARIFFS AND SENSITIVITIES
Indicative €/tCO2 cost to emitters
by scenario or by infrastructure
component, given assumptions
on CO2 volumes and timing
Sensitivities on financing mix and
cost of capital
Financing mix and cost of capital
sensitivities and impact on tariffs

21. THE PUBLIC MODEL
Financial Model
21
• Aim was to replicate the structure of the planning tool to develop a simple financial model to allow others to calculate the
costs and tariffs associated with CO2 transport and storage given different CO2 volumes
• The model is pre-set with readily available, non-confidential cost data and example scenarios, based on the reference case
outlined in the Institute Economic Assessment reports of 2009 and 2011
• The generic cost inputs can be adapted by users to reflect specific project data
• Calculates total T&S costs to emitters and examines impact of different commercial and financing structures
• Step by step user manual available on the Global CCS Institute website
• Model solves for tariffs payable (by emitters) to the transport and
storage operators based on the operator’s targeted return over life of
the project (set in Financing Assumptions)
• Availability and Throughput tariff structure
EMITTER
TARIFFS
• Separate detailed, annual statements for the transport and storage
operator for the active model scenario showing the achieved rate of
return and total tariff revenues per tCO2 (payable by CO2 emitters)
OPERATOR
FINANCIAL
STATEMENTS
QUICK CONTROL
ASSUMPTIONS
COST SCHEDULES
Key Components Outputs

22. KEY TAKEAWAYS
22

23. • Steering group recognised our findings on the cost drivers including the tariffs we calculated
• Sharing transport and storage infrastructure is a cost effective approach for CCS
• Efficient utilisation of the infrastructure requires the coordination of early CCS projects and/or some
confidence that a demo project can transition to full scale project
• Storage costs are significantly reduced when CO2 is injected close to the individual reservoir’s maximum
injectivity rates and therefore minimizing the operating period
• MMV costs during injection and for 20 years after closing the location can contribute between 4-13% to
the tariff, depending on the project timeframe.
• Assuming no existing infrastructure in place and a given project lifetime, the choice between a pipeline
and a ship will depend on the required CO2 throughput volumes and the transport distance
• The higher the proportion of CAPEX in the overall costs, the larger is the effect of a grant on tariff or total
cost
KEY TAKEAWAYS FROM THE ANALYSIS
Key Takeaways
23

24. 1. STIMULATE INVESTMENT CLIMATE
• CO2 allowances currently at historical low price point and therefore the investment signals for
CCS are extremely weak
• Scope for Government to:
• Ensure the transition from demonstration phase to commercial phase projects with
appropriate (master)planning to provoke initial investments and oversized infrastructure
• Provide early mover projects with appropriate incentives to ensure the first projects are
aligned to the future vision on CCS networks
• Mobilise other CCS stakeholders in the Netherlands, such as EBN and Gasunie, in order to
contribute to a common user transport and storage system
STEERING GROUP RECOMMENDATIONS FOR ACTION
Key Takeaways
24

25. 2. GOVERNMENT TO ENSURE CO2 STORAGE OPTIONS
• If CCS is going to fly storage space is a valuable asset which should be governed. Therefore
government should work with industry to:
• Work on CO2 storage characterisation and feasibility studies for saline formations on the
Dutch Continental Shelf
• Better understand the storage capacity elsewhere in the North Sea
• Provide input into a review of the EU CCS Directive, particularly in relation to long term
CO2 containment and liability issues
• Develop an appropriate regulatory framework that will treat storage as an “asset”,
including end of life policies for producing hydrocarbon fields and “storage ready”
certification
• Develop alternative business models for CO2 storage. For example public-private
partnerships and service-based models
STEERING GROUP RECOMMENDATIONS FOR ACTION
Key Takeaways
25

26. 3. GOVERNMENT TOGETHER WITH PIVATE PARTIES SHOULD ENABLE CO2 TRANSPORT
• Shared transport infrastructure and regional CCS networks can be very cost effective
• When oversizing: first mover face higher costs and risks than later joiners. Mitigated by
appropriate incentives for early mover projects as well as private public partnerships
• Issue of CO2 specifications in shared transport networks
• Developing models for long term CO2 transport regulation (parallel: bridges and highways)
• Enabling transboundary transport of CO2, starting with the ratification of the London Protocol
STEERING GROUP RECOMMENDATIONS FOR ACTION
Key Takeaways
26

27. 4. NATIONAL AND REGIONAL COOPERATION
• Discussion in the Netherlands is too focused on the pilot projects. Need for a broader view
• NL: Revive the National Taskforce on CCS (companies and government)
• NL+B: Emitters and Transport and Storage operators should work together to identify and
resolve key issues
• EU: Steering Group sees value in them working together with ZEP and NSBTF
• EU: Dialogue on regional level in Rotterdam, Eemshaven and Antwerp to support
discussion with the European Union
STEERING GROUP RECOMMENDATIONS FOR ACTION
Key Takeaways
27

28. PRACTICAL ADVICE FOR OTHER REGIONS
Key Takeaways
28
• Stakeholder coordination and engagement is key
• The emitter Steering Group provided strategic direction and input on a continuous basis
• Transport and Storage operators also provided guidance, primarily on technical specifications and
costs
• Early alignment of project objectives is critical
• Decisions on the issues to be raised and questions to be answered have an impact on the overall
design of the project, including scenario selection and potential for appropriate sensitivities
• Challenge to meet objectives of different stakeholders at different stages of project planning
• Scenarios developed based on real or planned short and medium term CO2 transport and storage
options
• Allowed the assessment of most realistic CCS network development pathways for the region
• However, a more speculative approach could have answered questions such as what is the optimum or
most cost effective configuration?
• To the extent possible, the analysis leveraged existing relevant technical and commercial studies
• Project team integrated existing technical and R&D expertise on CCS in the region

29. QUESTIONS AND ANSWERS
29

30. QUESTIONS / DISCUSSION
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31. Full report and financial model available from: http://
www.globalccsinstitute.com/publications/transport-and-storage-economics-
Please submit any feedback to: webinar@globalccsinstitute.com