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Costs

4.6.1 Costs of pipeline transport

The costs of pipelines can be categorized into three items

• Construction costs

- Material/equipment costs (pipe, pipe coating, cathodic protection, telecommunication equipment; possible booster stations)

- Installation costs (labour)

• Operation and maintenance costs

- Monitoring costs

- Maintenance costs

- (Possible) energy costs

• Other costs (design, project management, regulatory filing fees, insurances costs, right-of-way costs, contingencies allowances)

The pipeline material costs depend on the length of the pipeline, the diameter, the amount of CO2 to be transported and the quality of the carbon dioxide. Corrosion issues are examined in Section 4.2.2 For costs it is assumed that CO2 is delivered from the capture system at 10 MPa.

Figure 4.3 shows capital investment costs for pipelines. Investments are higher when compressor station(s) are required to compensate for pressure loss along the pipeline, or for longer pipelines or for hilly terrain. Compressor stations may be avoided by increasing the pipeline diameter and reducing the flow velocity. Reported transport velocity varies from 1 to 5 m s-1. The actual design will be optimized with regard to pipeline diameter, pressure loss (required compressor stations and power) and pipeline wall thickness.

Costs depend on the terrain. Onshore pipeline costs may increase by 50 to 100% or more when the pipeline route is congested and heavily populated. Costs also increase in mountains, in nature reserve areas, in areas with obstacles such as rivers and freeways, and in heavily urbanized areas because of accessibility to construction and additional required safety measures. Offshore pipelines generally operate at higher pressures and lower temperatures than onshore pipelines, and are often, but not always, 40 to 70% more expensive.

It is cheaper to collect CO2 from several sources into a single pipeline than to transport smaller amounts separately. Early and smaller projects will face relatively high transport costs, and therefore be sensitive to transport distance, whereas an evolution towards higher capacities (large and wide-spread application) may result in a decrease in transport costs. Implementation of a 'backbone' transport structure may facilitate access to large remote storage reservoirs, but infrastructure of this kind will require large initial upfront investment decisions. Further study is required to determine the possible advantages of such pipeline system.

Figure 4.4 presents onshore and offshore transport costs versus pipeline diameter; where costs are based on investment cost information from various sources. Figure 4.5 gives a cost window for specific transport as function of the flow. Steel is a cost component for both pipelines and ships, and steel prices doubled in the two years up to 2005: this may be temporary.

4.6.2 Costs of marine transportation sys tems

Costs of a marine transport system comprise many cost elements. Besides investments for ships, investments are required for loading and unloading facilities, intermediate storage and liquefaction units. Further costs are for operation (e.g. labour, ship fuel costs, electricity costs, harbour fees), and maintenance. An optimal use of installations and ships in the transport cycle is crucial. Extra facilities (e.g. an expanded storage requirement) have to be created to be able to anticipate on possible disruptions in the transport system.

The cost of marine transport systems is not known in detail at present, since no system has been implemented on a scale required for CCS projects (i.e. in the range of several million tonnes of carbon dioxide handling per year). Designs have been submitted for tender, so a reasonable amount of knowledge is available. Nevertheless, cost estimates vary widely, because CO2 shipping chains of this size have never been built and economies of scale may be anticipated to have a major impact on the costs.

A ship designed for carrying CO2 from harbour to harbour may cost about 30-50% more than a similar size semi-refrigerated LPG ship (Statoil, 2004). However, since the density of liquid CO2 is about 1100 kg m-3, CO2 ships will carry more mass than an equivalent LNG or LPG ship, where the cargo density is about 500 kg m-3. The estimated cost of ships of 20 to 30 kt capacity is between 50 and 70 M$ (Statoil, 2004). Another source (IEA GHG, 2004) estimates ship construction costs at US$ 34 million for 10 kt-sized ship, US$ 60 million with a capacity of 30 kt, or US$ 85 million with a capacity of 50 kt. A time charter rate of about 25,000 US$ day-1 covering capital charges, manning and maintenance is not unreasonable for a ship in the 20 kt carrying capacity range.

The cost for a liquefaction facility is estimated by Statoil (2004) at US$ 35 to US$ 50 million for a capacity of 1 Mt per year. The present largest liquefaction unit is 0.35 Mt yr-1.

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