Feasibility Study for Project Development of CCUS …Feasibility Study for Project Development of CCUS (CO2-EOR) in South Sumatra, Indonesia Conducted by: Japan Petroleum Exploration

Feasibility Studies with the Aim of Developing a

Joint Crediting Mechanism in FY2017

Feasibility Study for Project Development of

CCUS (CO2-EOR) in South Sumatra, Indonesia

New Energy and Industrial Technology Development Organization (NEDO)

Japan Petroleum Exploration Co. Ltd. (Lead) and Sojitz Corporation

Feasibility Study for Project Development of CCUS (CO2-EOR) in South Sumatra, Indonesia

Conducted by: Japan Petroleum Exploration Co. Ltd. (Lead) and Sojitz Corporation

NEDO Feasibility Studies with the Aim of Developing a Joint Crediting Mechanism

Country: Indonesia Sector: Carbon Capture and Storage

Study Outline

The Indonesian government has set a greenhouse gas

(GHG) emissions reduction target of 29% (which would

increase to 41% if assistance from other countries is

received) from business as usual levels by 2030. Additional

oil recovery through EOR technology is one of the

Indonesian government’s basic policies. Depleted conventional oil fields and CO₂ sources such as natural gas

processing plants, which are potential sites for CCUS

projects that will lead to GHG emissions reduction and

additional oil recovery, are the targets of this study.

CO₂ removed at a gas processing plant in South Sumatra

can be transported and injected into oil fields for storage though EOR technology and achieve 300 ktpa of CO₂emissions reduction. The estimated overall CO₂ emissions

volume in South Sumatra is 3,600 ktpa. If CCUS (CO₂-EOR)

technology is successfully implemented, the level of CO₂emissions reduction from this area could reach 2,200 ktpa. As CO₂-EOR technology is widely implemented over the

next 10 years, the installation of support infrastructure (e.g., CO₂ pipelines) is also expected to increase so that CO₂ can

be recovered from nearby thermal power plants with further

emissions reduction expected in the range of several million

tons.

To address the first and second technical issues, a pilot test

utilizing WAG technology (see slide four) will be conducted

as the first example of CCUS implementation in Indonesia.

If shown to be economically viable, this feasibility study

could serve as a pioneering effort for Indonesia to promote

the diffusion of CCUS implementation not only in South

Sumatra but also in other areas of the country and

potentially make possible larger acquisitions of carbon

credits.

Working together with LEMIGAS, a major national oil and

gas research and development institute in Indonesia, the

study examined the feasibility of conducting a carbon

capture, utilization, and storage (CCUS) carbon dioxide enhanced oil recovery (CO₂-EOR) operation utilizing water

alternating gas (WAG) technology in South Sumatra. Any

carbon credits acquired through the project will be applied to

the Joint Crediting Mechanism (JCM).

Summary

Needs of partner country

1. Controlling CO₂ pressure in oil reservoirs in South Sumatra is

difficult due to the typically heterogeneous properties of

sand/mud alternating layers.

2. During identification of CO₂ sources and mature oil fields, there

is a possibility of not being able to carry out miscible

displacement because of pressure drops caused by the

shallow depth of oil layers and oil production activity.

3. No established methodology exists to quantify emission

amounts.

Technical issues

Prospects for dissemination

Estimated reduction of greenhouse gas emissions

2

Study Items and Objectives

Study Items Objectives

1 Reservoir simulation/CO₂-EOR

for specific oil fields using WAG

method

Estimation of incremental oil in the case of continuous CO₂ and WAG injection

methods by using reservoir simulation model Preparation of simplified reservoir model for further investigation of CO₂ injections

2 Study of CO₂ sources and sinks

for selection of suitable oil fields

Investigation of CO₂ sources and CCUS target oil fields in South Sumatra area

where many oil fields suitable for CCUS are expected to be found

3 Cost estimation of capital and

operating expenditures for basic

project facilities, and analysis of CO₂ emissions reduction

Preparation of facility and well conceptual design and cost estimates using

specialized software which generates estimates of capital expenditures, operating

expenditures, and energy consumption. Costs for oil wells were calculated for both

new and refurbished wells.

4 CCUS project scheme and

economic analysis

Consideration of project structure, including financing options

Evaluation of project economics under contemplated structure

5 Pilot test planning and design Preparation of conceptual pilot test design, schedule, and cost estimates

6 Introduction of CO₂ credits and

study of monitoring, reporting,

and verification methodologies

Preparation of draft JCM methodology for project by referring to draft ISO standard

and ACR (American Carbon Registry methodology)

7 Investigation of CCUS

regulatory framework in

Indonesia

Investigation of Indonesian regulatory framework relevant to CCUS, e.g.

regulations relevant to CCUS pilot test and commercialization

3



WAG technology

Monitoring technology

The CCUS technology in this project consists of CO₂ storage and

utilization technology known as CO₂-EOR. Japan Petroleum

(JAPEX) has expertise in CCS technology with an ongoing CO₂injection demonstration project in Tomakomai and a CO₂-EOR pilot

test at its Sarukawa oil field located in Akita Prefecture.

Since this study involves storing CO₂ in underground reservoirs, it is necessary to monitor

the safety and stability of the injected CO₂. JAPEX already has experience in utilizing

various monitoring technologies (e.g., inter-well pulse testing, logging, and seismic

tomography) at its Sarukawa oil field.

Technology Outline

CCUS technology

13,250m

7,100m

Depth of Grid Top = 1217.5m

Depth of Grid Bottom = 1607.5m

390m

Water alternating gas (WAG) technology is an improved oil recovery

method which works by alternately injecting water and gas. In

heterogeneous oil layers with different levels of permeability, a common

situation in Indonesia, the modification of gas and water alternating

injections is necessary to increase the amount of recoverable oil in

each layer. JAPEX already has experience in utilizing WAG technology

at Japanese oil fields similar to those found in Indonesia, for example,

at its Sarukawa and Iwafuneoki oil fields in Niigata Prefecture.

INJ-CO2

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Gas Saturation 3000-01-01 J layer: 21

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25 years

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Permeability I (md) 2025-01-01 J layer: 21

model

Source: Japan CCS Co., Ltd.

Tomakomai CCS demonstration plant

EOR pilot test results from Sarukawa oil field

Example of CCS study

WAG concept

Monitoring results

CO₂ injection start

Injection wellProduction wellObservation well

10

m

CO-2 CO-1

Source: JNOC-JAPEX “Joint research for

EOR technology, CO₂ flooding Sarukawa

project,“ fiscal year 1999 report



CO₂ injection starts

CO₂ injection ends

Achievements and Challenges

5

Achievements

Development of new approach to effectively reduce CO₂ in

compliance with JCM by applying WAG to adjacent oil fields

in multiple phases.

Simulations based on a simplified model suggest thathigher level of CO₂ emissions reduction and

larger increments of oil are obtained during WAG injections and CO₂ continuous injections in multiple

phases.

Reductions of capital expenditures by using CO₂recycling facilities in oil fields.

Challenges

Need for dialogue with Indonesian stakeholders such as

Directorate General of Oil and Gas (DG MIGAS) and

Pertamina, the state-owned oil and gas corporation, to jointly

study whether multiphase WAG approach can be applied to

actual oil fields from technical to commercial levels.

Need to establish business relationship and conduct joint

study with Pertamina in order to, among other things, select candidates for CO₂ sources and sinks.

Prior to commencement of commercial-scale CCUS project, pilot test indispensable not only for CCUS (CO₂- EOR)

technology but also for any other type of EOR technology.

For commercial development of CCUS (CO₂-EOR)

technology in Indonesia, need for cooperation and

collaboration between public and private sectors in Indonesia

and Japan.

Image of areal multiphased WAG as CCUS (CO₂-EOR)

Comparison of WAG and CO₂ continuous injection methods



Documents

Feasibility Study for Project Development of CCUS …Feasibility Study for Project Development of CCUS (CO2-EOR) in South Sumatra, Indonesia Conducted by: Japan Petroleum Exploration