The Middle East could become the world's leading region to capture carbon dioxide for future use in enhanced oil recovery or for storage, with Mitsubishi Heavy Industries Ltd. (MHI) forecasting the market in the region at 50 million mt/year in a decade, led by steps now being taken by the UAE and Saudi Arabia, along with an unusual project now starting in Bahrain.
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MHI is working with Aluminium Bahrain (Alba) to capture CO2 from its aluminum smelter and also signed an agreement in January to conduct a feasibility study on the first use of MHI technology to capture carbon dioxide from flue gas from an Alba power plant. Both projects could ultimately capture 500,000 to 1 million mt/year of carbon sometime in the 2030s, Emmanouil Kakaras, head of the energy transition business in Europe and the Middle East for MHI, said in an interview with S&P Global Commodity Insights. He noted that an average power station running on coal can have 12% to 15% CO2 in the flue gas, making it "relatively easy" to capture the carbon, while a gas-powered plant can have 4% to 5% while an aluminum smelter can have 0.9% to 1%, he said.
MHI's forecast for 50 million mt/year in a decade compares with a global 80 million mt/year for 2030 estimated by S&P Global Platts Analytics and the International Energy Agency's view based on stated policies for 89 million mt/year in 2030. "Our 80 million is based on commercially viable announced projects across various end use sectors ranging from EOR to oil refining to power generation and does not include significant levels of speculative CCUS capacity," Mark Mozur, manager of future energy outlooks for Platts Analytics, said.
The Global CCS Institute says the UAE and Saudi Arabia already accounted for 10% of global annual capture in 2020, at 3.7 million mt/year, and forecasts the Gulf Cooperation Council states could alone have a total of 60 million mt/year by 2035.
"We are in the beginning of this journey in the region, but the region is taking bold steps," Kakaras said. "I am confident this region will become one of the major CO2 hubs. Being an oil and gas region, it's a natural evolution. On the storage side, it's picking up speed. There will be worldwide CO2 hubs able to receive CO2 and store it.''
Saudi Arabia is developing receiving infrastructure for permanent CO2 storage, including pipelines to send carbon miles away for storage or for use in enhanced oil recovery, he noted. The UAE's Abu Dhabi National Oil Co. plans to expand the capacity of its carbon capture program six-fold by capturing CO2 from its own gas plants, with the aim of reaching 5 million mt/year of CO2 by 2030, according to a recent company announcement.
"We are witnessing lots of development work on CO2 storage from ADNOC but also from the Saudi government and what we're doing with Alba," Kakaras said. "We can speculate what the future will bring, but there will be an ecosystem of C02 that will be a network of meters and storage facilities not necessarily existing next to each other.''
Mitsubishi Power, a power solutions part of MHI, is a major power plant developer in the Middle East, installing its first power units in the region in 1971 for Saudi Aramco sites in Saudi Arabia, and has an installed base of nearly 50% of Kuwait's total installed power capacity. It is currently executing over 4GW of projects in the Middle East and North Africa, including developing a 2.4 GW power plant in the UAE's Fujairah emirate and the 1.0263 GW Layyah project in the nearby Sharjah emirate, aiming to become the leading supplier of power in the region in the next few years.
The majority of Mitsubishi Power gas turbines at power plants in the region can be adapted to burn fuel that contains up to 30% carbon-free hydrogen, another step that may help the Middle East to reduce its carbon footprint, Kakaras said.
The use of hydrogen and natural gas in a power plant was successfully used in June 2022 at a natural gas turbine at Georgia Power's McDonough-Atkinson plant in the US. Mitsubishi Power also recently agreed to provide hydrogen fuel conversion technology at Alexandria National Refining & Petrochemicals Co.'s refinery in Alexandria, Egypt, which provides 30% of the country's domestic gasoline supplies.
Hydrogen needs to be available for the Middle East to grow the business, which isn't expected until at least the end of the decade, Kakaras said. "The Middle East is very promising for hydrogen because it's blessed with renewables potential and some of the cheapest solar power than can be harvested," he said. "But you have to speed up and deliver projects at size and this goes together with an ambition to decarbonize. If there is an ambition to reduce carbon emissions, this will come together with development."
The Middle East can develop very large projects to justify the cost of the investment, Kakaras said. He noted it can take two to four years to build a power plant in the Middle East, where Mitsubishi Power expects power demand will grow an average 2% a year for the next few years, equivalent to 5-7 GW of new capacity a year to meet demand from a growing population and economic development goals.