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SPE International Conference on CO2 Capture, Storage, and Utilization,
10-12 November 2010,
New Orleans, Louisiana, USA
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Abstract
For CO2 enhanced oil recovery (CO2-EOR) and CO2 storage projects, cost
estimates have wide-ranging impacts on site screening and feasibility studies,
concept selection, development planning, and production optimization. Good cost
estimating practice requires technical knowledge about the project, a
comprehensive scope, and a systematic approach. However, the quality of a
cost estimate is probably most dependent on the quality of the data on which it
is based. In the case of CO2-EOR and CO2 storage projects (CO2 projects), cost
estimators face significant challenges regarding the availability and quality
of data. The purpose of this paper is to organize and consolidate information
on capital and operational costs for CO2 projects. A review was undertaken to
identify and describe sources for cost data by major project components. There
are sections for drilling, surface facility capital cost, and operation and
maintenance cost. This survey can serve as a departure point for CO2 project
cost estimators.
Introduction
For CO2 enhanced oil recovery (CO2-EOR) and CO2 storage projects, cost
estimates have wide-ranging impacts on site screening and feasibility studies,
concept selection, development planning, and production optimization.
Inaccurate cost estimates can lead to sub-optimal decisions and the destruction
of portfolio and project value. Good cost estimating practice requires
technical knowledge about the project, a comprehensive scope, and a systematic
approach. However, the quality of a cost estimate is probably most dependent on
the quality of the data on which it is based.
In the case of CO2-EOR and CO2 storage projects (CO2 projects), cost estimators
face significant challenges regarding the availability and quality of data.
First, there is a relatively small population of projects from which to obtain
cost data. These projects are unevenly distributed among ~20 companies, and
each project exhibits idiosyncrasies which complicate cost normalization and
definition of standard metrics. Also, cost data is often treated as proprietary
and not shared among
companies nor with the public. Thus, cost estimating for CO2 projects can be a
complicated and costly undertaking.
The range of experience with CO2 projects among oil and gas companies covers a
wide spectrum. Some oil and gas companies operate several projects and hold
ample cost data on which to base cost estimates. But even within experienced
companies, data may be highly concentrated in one region and in some cases may
not translate easily to other regions. Other companies have no experience and
no internal basis for estimating. In between these two extremes are companies
who have some experience in CO2 projects, or other general operational
experience that can be leveraged (e.g. a company with considerable drilling
experience but no experience in CO2 projects).
While CO2-EOR projects have historically been the domain of oil and gas
companies, other parties are now interested in these projects, and in the
prospect for large scale CO2 storage projects. In this category are academic
researchers, nongovernmental organizations, federal and state agencies, and
private landowners. These parties are unlikely to have experience with CO2
projects and thus possess a very limited basis for cost estimating.
The purpose of this paper is to organize and consolidate information on capital
and operational costs for CO2 projects. A review was undertaken to identify and
describe sources for cost data by major project components. There are sections
for drilling, surface facility capital cost, and operation and maintenance
cost. This survey can serve as a departure point for CO2 project cost
estimators.
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