Economic Evaluation for Potential CCUS Integration Project Between Ammonia Plant and Oil Field Tertiary Recovery Using CO2 Injection in Indonesia

Abstract

Abstract Indonesia is committed to reducing global greenhouse gas emissions, especially in the industrial and energy sectors. One of the big opportunities is implementing carbon capture, utilization, and storage (CCUS) in Ammonia production as it has the lowest overall CCUS cost and geographically the existing ammonia plant is strategic to the potential oil field. This paper discusses the economic evaluation for the CCUS integration project between an ammonia plant and oil field tertiary recovery using CO2 injection, along with the sensitivity analysis of the economic variables. The selection process of a potential oil field that will be injected is based on the characteristic of its reservoir and its production performance. Furthermore, the distance between the oil field and the existing ammonia plant is also considered to minimize the transportation cost of CO2. The study of economic model contract for ammonia plant constructed by cashflow analysis. While for the Oilfield CO2 Injection project refers to Indonesia's existing oil and gas contract model, which is the Production Sharing Contract (PSC) cost recovery and gross split. In addition, several economic variables sensitivity was performed, such as oil price, oil production rate, capital expenditures, operation expenditures, and CO2 price. Economic evaluation from ammonia plants and oil fields shows fairly good economic indicators. The economic parameter for the ammonia plant gives 13.54% of IRR, 661.95 MMUSD of NPV, and 6.19 years of pay-out time. On the oil field side, the PSC Cost Recovery scheme offers the contractor 18.82 % of IRR, 0.33 MMUSD of NPV, and 4.85 years of pay-out time. In comparison, the PSC Gross Split scheme offers 19.55% of IRR, 0.40 MMUSD of NPV, and 5.48 years of pay-out time. For this study, the result indicates PSC Gross Split scheme gives a better economic parameter than PSC Cost Recovery. The sensitivity analysis shows that oil prices and capital expenditure are very significant on economic parameters. Therefore, government policies are required to give contractors more attractive economic parameters. Based on the economic evaluation, implementing CCUS in the small field gives a fairly good result for economic parameters. Furthermore, this paper provides a comprehensive assessment based on an economic evaluation of the ammonia plant and oil field that could give additional information to the government as the policy maker to accelerate the implementation of CCUS integration, particularly in small fields in Indonesia.