Costs of Ship Based Transportation

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.

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A ship designed for carrying CO2 from harbour to harbor 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. IEA GHG (2004) estimates a considerable lower investment for a liquefaction facility, namely US$ 80 million for 6.2 Mt/yr. Investment costs are reduced to US$ 30 million when carbon dioxide at 100 bar is delivered to the plant. This pressure level is assumed to be delivered from the capture unit. Cost estimates are influenced by local conditions; for example, the absence of sufficient cooling water may call for more expensive ammonia driven cooling cycle. The difference in numbers also reflects the uncertainty accompanied by scaling up of such facilities.

A detailed study (Statoil, 2004) considered a marine transportation system for 5.5 Mt/yr. The base case had 20 kt tankers with a speed of 35 km/h, sailing 7600 km on each trip; 17 tankers were required. The annual cost was estimated at US$ 188 million, excluding liquefaction and US$ 300 million, including liquefaction, decreasing to US$ 232 million if compression is allowed (to avoid double counting). The corresponding specific transport costs are 34, 55, and 42 US$ t-1. The study also considered sensitivity to distance: for the case excluding liquefaction, the specific costs were 20 US$ t-1 for 500 km, 22 US$ t-1 for 1500 km, and 28 US$ t-1 for 4500 km.

A study on a comparable ship transportation system carried out for the IEA shows lower costs. For a distance of 7600 km using 30 kt ships, the costs are estimated at 35 US$ ton-1. These costs are reduced to 30 US$ ton-1 for 50 kt ships. The IEA study also showed a stronger cost dependency on distance than the Statoil (2004) study.

It should be noted that marine transport induces more associated CO2 transport emissions than pipelines due to additional energy use for liquefaction and fuel use in ships. IEA GHG (2004) estimated 2.5% extra CO2 emissions for a transport distance of 200 km and about 18% for 12,000 km. The extra CO2 emissions for each 1000 km pipelines come to about 1 to 2%.

 

Ship transport becomes cost-competitive with pipeline transport over larger distances. The above figure shows an estimate of the costs for transporting 6 Mt/ yr by offshore pipeline and by ship. The break-even distance, i.e. the distance for which the costs per transport mode are the same, is about 1000 km for this example. Transport of larger quantities will shift the break-even distance towards larger distances. However, the cross-over point beyond which ship transportation becomes cheaper than pipeline transportation is not simply a matter of distance alone.

It involves many other factors, including loading terminals, pipeline shore crossings, water depth, seabed stability, fuel cost, construction costs, different operating costs in different locations, security, and interaction between land and marine transportation routes.

 

CO2 Transportation