Cost of Pipeline Based Transportation
The costs of pipelines can be categorized into three items
- Construction costs
- Material/equipment costs (pipe, pipe coating, telecommunication equipment; possible booster stations)
- Installation costs (labour)
- Operation and maintenance costs
- Monitoring costs
- Maintenance costs
- Energy costs
Other costs (design, project management, regulatory filing fees, insurances costs, right-of-way costs, contingencies allowances)
Initial capital costs, up-front capital outlays for a new CO2 pipeline network are substantial. MIT for example has estimated overall annualized pipeline transportation (and storage) cost of approximately $5 per metric ton of CO2. The 2007 Duke study, estimated it would cost approximately $5 billion to construct a CO2 trunk line along existing pipeline rights of way to transport captured CO2 from North Carolina to potential sequestration sites in the Gulf States and Appalachia.
For costs it is assumed that CO2 is delivered from the capture system at 10 MPa. 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.
Investments are higher when compressor stations 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. 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.
Steel is a cost component for both pipelines and ships, and a 2008 Congressional Research Service Report shows that US prices for double-submerged arc-welded pipes with a diameter larger than 0.61 metre (24 inches) had doubled, rising from USD 600/t CO2 in 2003 to USD 1200/t CO2 in 2006).
Table presents the steel and labor requirements estimated for five CO2 pipeline distance scenarios and their projected costs.
The graphs the curves showing the upper and lower limits for onshore and offshore pipelines (low and high ranges) from the IPCC report (IPCC, 2005b) and a worldwide compilation of recent project costs based on the Oil and Gas Journal (OGJ, 2007). Several data points for recent onshore costs now lie outside the two higher boundaries, largely because of steel costs but also because of higher labour costs in the oil and gas sector. An updated engineering-economic model for CO2 pipeline transport estimates that for a 100-km onshore US pipeline handling 5 Million tonnes of CO2 (e.g. from a 800 MW coal-fired power station), the cost is about USD 1.16/t CO2 .
The cost of transporting CO2 per unit of weight is much lower than for natural gas or hydrogen because it is transmitted in a liquid or supercritical state with a density 10 to 100 times higher than that of natural gas. Several technical and financial parameters determine the estimated costs per ton of transported CO2, which vary from USD 2/t CO2 to USD 6/t CO2 for 2 Mt transported over 100 km per year, and from USD 1/t CO2 to USD 3/t CO2 for 10 Mt transported per year over the same distance.