This is almost ridiculous enough to be funny.
December 15, 2008
Algeria’s Carbon-Capture Experiment
A venture by Algeria’s Sonatrach, BP, and
Norway’s Statoil to strip CO2 out of natural gas
and store it underground could help cut emissions
By Stanley Reed
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
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
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. The CO2 is then whisked along
separate pipelines and pumped a mile into the
ground into a body of water beneath the gas
field. The companies figure that by the time the
gas migrates up into the gas part of the
reservoir, the project’s life will have ended.
The big question is whether the CO2 will somehow
escape into the atmosphere or, perhaps,
contaminate important nearby water supplies. One
In Salah executive said that the biggest danger
is that the CO2 could somehow escape into an
ancient aquifer that lies above the gas field.
The companies, however, are confident that this
reservoir, which has a thick layer of shale
forming a seal on top, will prove impervious.
Their thinking is that if it has held gas for
thousands of years, that’s good reason to think
it can do so in the future.
Although the environmental bent of former BP CEO
John Browne is said to have influenced BP’s
decision to go ahead with In Salah, the
international companies and Sonatrach are not
altruists. They see economic potential in what
they are doing in In Salah. Both BP and Statoil
are heavily invested in the growing business of
supplying gas to Europe. Algeria is one of
Europe’s key gas sources, accounting for about
10% of European consumption.
With the European Union pressuring industry to
reduce carbon emissions sharply, projects such as
In Salah that cut CO2 could prove increasingly
valuable to their owners. Sahnoun, who oversees
Sonatrach’s many joint ventures with
international companies, says what’s being done
in In Salah is “likely to be generalized to the
rest of the projects in the area.” In particular,
he says upcoming gas field developments with Gaz
de France (GSZ.PA), Total (TOT), and Repsol (REP)
look like good candidates for carbon capture and
storage. It isn’t yet clear, though, how the EU
will consider gas from projects outside its
borders, such as In Salah.
What’s more, not all gas projects may be suitable
for the technology being pioneered at In Salah.
Some gas fields don’t have high CO2
concentrations. And having the right type of
reservoir, such as the one that lies beneath
Krechba, also helps make the project viable
economically. Keddam, the In Salah
vice-president, pegs the total cost of carbon
storage at In Salah at about $14 per ton-which he
thinks is substantially below what the EU is
likely to charge for CO2 emissions. In Salah
alone is not going to save the world, but it
could prove a step in the right direction.
With Mark Scott in London
Reed is London bureau chief for BusinessWeek.