Including sub-surface uncertainties in CCS hub investment decision making – a case history

Large-scale carbon capture and storage (CCS) hub investments require design choices regarding sizing (in Mt-CO2/year) and project build-out phasing. Investments in capture and transport represent the majority of overall project capex, with the ‘size’ of that infrastructure ideally optimised to capture and deliver steady rates over the asset lifetime. However, there is a risk that the sub-surface injection (i.e. storage) rate cannot be sustained at the specified capture rate. The investment risk in sizing major capture and transport equipment therefore lies in the uncertainty surrounding future dynamic performance of the storage site(s). This paper builds on a previous investigation for the Surat Basin, examining the role that sub-surface uncertainties play in this hub- sizing risk. Articulating the value of investment in additional appraisal information, shows that the acquisition of critical, uncertainty-defining data can reduce final investment risk in capture and transport, helping to ‘right size’ the hub build. Screening-stage modelling of technical and economic uncertainty plays a crucial role, characterised with a target unit technical cost (UTC) that represents the life-cycle, constant real-terms, carbon price ($/t) required for storage that would result in a break-even economic development. The presence of pre-development uncertainties in long-term dynamic performance, and the need for appraisal to reduce that uncertainty, effectively increase the required break-even storage price. Alternatively, ignoring that uncertainty could lead to under-performance of the storage resource (inability to sequester at the capture design-rates) and significant over-investment in capture and transport infrastructure, increasing the overall cost of CO2 sequestration.