CARBON VALUATION ECONOMICS IMPACT ON GAS FIELD CARBON CAPTURE UTILIZATION AND STORAGE PROJECT IN A PSC ENVIRONMENT

• Main Author: Lukman Mahfoedz, Raihan
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77585
• Institution: Institut Teknologi Bandung

PT Petro Gasindo has been a major gas producer in Indonesia since 2009 and has been a major LNG supplier to power up Indonesia. While LNG emission intensity is already significantly lower than other fossil fuels such as coal, the climate emergency the world is facing right now requires all possible reductions available. PT Petro Gasindo is currently looking at developing a CCUS project which further reduces CO2 emissions from the reservoir by using it to enhance gas recovery before storing it permanently in the reservoir. CCUS have been around for decades in the industry but facing challenges in the implementation due to its high cost. For oil production, one of the ways to alleviate the cost pressure is by using it to enhance oil production (CO2-EOR). PT Petro Gasindo is looking to implement similar principles to a gas reservoir and will positively impact the overall project economics. The amount of additional gas recovery is modelled via a detail subsurface description put into a reservoir simulator. Several development options are assessed to select the optimum development scenario, with several economic and technical sensitivities around well and platform numbers, capital and operating expenditures, and the associated carbon value. The economics analysis of these sensitivities is presented and calculated using a PSC cost recovery fiscal regime, with both Contractor and Government Take NPV and IRR. The analysis shows that even with the enhanced gas recovery, the economics are very marginal for the contractors. However, from Government's point of view, the project will still make a positive cashflow from tax and the profit split. The analysis is showing several possible levers to increase the attractiveness of the project to the contractor, such as reduction in capital expenditures, but the most significant one is adding a carbon credit value from the CO2 sequestration. A modest value of $30/tonne will significantly increase the project's attractiveness from Contractor's point of view.