Supermajors lead pack for sequestration storage with Southern Louisiana identified as world-class location
Calgary, Alberta (August 23, 2022) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the leading global energy data analytics and SaaS technology company, has released a report containing the status and scope of carbon capture, utilization and storage (CCUS) projects around the world.
EIR’s records document 10 million tons per annum of operational global sequestration capacity, which represents merely 3% of planned capacity. When evaluating sequestration locations, the report and ranking considered reservoir quality and proximity to point source emissions and transportation as leading indicators. As a result, the Southern Louisiana Oligocene-Miocene, with its clean sand aquifers, stood out among numerous locations and is now deemed among the best storage reservoirs in the world by EIR.
“With the recent, substantial uptick in CCUS project announcements across the lower 48, Southern Louisiana stands out as a major hotbed for current and future sequestration activity,” said Evan MacDonald, senior geology associate at Enverus. “To develop an idea of how these projects stack up in terms of storage potential, and to derive insights into future project potential, a firm understanding of the reservoir being injected into is essential. We aim to not only daylight and compare the projects that have been announced thus far but provide a look at opportunities that may lie in the near term, for future projects of their kind.”
Oil and gas supermajors like ExxonMobil, BP, Shell and Equinor are leading the pack for global carbon dioxide sequestration capacity, while large independent operators like California Resource Corp., Occidental and Denbury have revealed plans to participate in both permanent storage and CO2-EOR operations. Kinder Morgan, Denbury and Occidental hold the most operational CO2 pipe in North America and likely have optionality to market near-term spare capacity to other companies as operations ramp.
Given the world-class reservoirs and volume of cheap-to-abate emissions, EIR anticipates a race to locate the most competitive storage opportunities and associated value chain partners which could set off a rush now that the Inflation Reduction Act has become law.
Key takeaways:
- Increasingly supportive policy and decarbonization commitments helped catalyze a wave of CCUS project announcements across the U.S., Canada and European countries bordering the North Sea. Using information disclosed through the end of 2021, North American operational and proposed projects amount to 280 mtpa or 63% of global capture capacity. European equivalents account for 29%.
- Planned projects in the UK aim to address 45% of 2019 (pre-COVID) point source emissions using carbon capture technology, compared to 27%, 10% and 8% in Canada, the Netherlands, and the U.S., respectively. All four countries hold some form of net zero 2050 ambitions and have announced incentives to support CCUS operations.
- Eight project locations for CO2 sequestration in Louisiana have been announced amounting to 2 gigatonnes (Gt) of combined disclosed storage, with first injection dates scheduled between 2022 and 2026. For reference, current global permanent CO2 storage only sums to 10 million tonnes per annum (mtpa).
- Enverus subsurface modeling suggests 1.5 Gt of CO2 storage capacity across all projects, falling short of operator disclosure by 30%. While still 15% below company estimates, we believe DEN’s New Orleans site offers the highest capacity at 425 million tonnes (Mt).
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About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser.
