Gasification Technology Conference 2009Gasification Technology Conference 2009

Colorado Springs, USAOctober 04-07, 2009

Prospects for Gasification in a Carbon Constrained Prospects for Gasification in a Carbon Constrained ppWorld:World: A European PerspectiveA European Perspective

Fausto Ferrari (Speaker) Saipem S.p.A. - Italy

Coauthor:Coauthor:

Ivano Miracca Saipem S.p.A. – Italy

IndexIndex

IntroductionIntroduction Gasification Projects OverviewPl t A il bilitPlant AvailabilityCCS PerspectiveSaipem CCS ExperienceConclusionConclusion

Saipem Global PresenceSaipem Global PresenceHuman Resources by Nationality:

Italy18%

India10%

Nigeria8%

Others <2%17%

Algeria Philippines

• 37,990 people @ December 31, 2008•115 Nationalities

Malaysia2%

2%

Nepal2%

UK2%

Saudi Arabia2%

Angola3%Russia

3%

Perù4%

France7%Venezuela

5%

8%

Kazakhstan7%

Paris Milan

Operating and E i i H b

Fano

ChennaiEngineering HubsEngineering CentresYards & Main Logistic BasesOther Main Areas and Other Main Areas and Representative Offices

Saipem FinancialsSaipem Financials

(M€)

Revenues Backlog

1910519105 1901519015

New Contract Acquisitions

100941009493189318

92019201

70497049

1543615436913591351386013860

1184511845

75227522

53245324

313100

51255125

93189318

472472435435

51585158

24062406

14631463701701

3759375934173417

17271727

38043804

7522752260706070

1197119716441644 760760635635 50685068

23402340

38633863

00

34633463420420

24062406

21972197286286269269

2008200820072007 1H20091H2009

4682468242154215 43494349

2008200820072007 1H20091H2009

4381438134963496

16441644 23402340

331331533533

186418642008200820072007 1H20091H2009

OnshoreOffshore

Saipem Group Business UnitsDrilling Offshore

Onshore

IntroductionIntroduction

Topics:Topics:• “Learning curve” in design, construction and

operation of IGCCp• High Availability of IGCC plants >90%• Experience & Lesson learnedExperience & Lesson learned• CCS application to gasification• Economics of CCS• Economics of CCS• CCS activities in Saipem

Gasification PlantGasification PlantContract SummaryContract Summary

Cli tClient ISAB Sarlux Eni-EniPower

Contract type LSTK LSTK LSScope of work EPC EPC EPCScope of work EPC EPC EPCContractor(s) SP(50)/FWI(50) SP(58)/GE(42) SP

Licensor(s) GE(Texaco) GE(Texaco) ShellDow/Lurgi UOP/Lurgi Dow/UOP

Detailed eng SP/FWI SP SPDetailed eng. SP/FWI SP SPConstruction SP/FWI SP SP

POWER BLOCK Ansaldo Industria GE AnsaldoEnergia

Projects OverviewProjects OverviewSSSummarySummary

SARLUX (SARLUX (~550 MWe)~550 MWe) ISAB Energy (ISAB Energy (~560 MWe)~560 MWe) ENI (~250 MWe)ENI (~250 MWe)

- Feedstock: VVR(Tar) - Feedstock: Asphalt - Feedstock: VVR(Tar)- GE(Texaco) “quench” - GE(Texaco) “quench” - Shell “radiant cooler”- “Low” pressure (38 barg) - “High” pressure (67 barg) - “High” pressure (62 barg)- “Physical” SRU (Selexol-UOP) - “Hybrid” SRU (MDEA-Dow) - “Hybrid” SRU (MDEA-Dow)- Sulphur tail gas recycled - Sulphur tail gas to incinerat. - Ni-Carbonyls removal- Hydrogen (Membr.+PSA -UOP) - Expander - Hydrogen (Membr.+PSA) - 3 x STAG109E (GE/NP) - 2 x V94.2 (Siemens/Ansaldo) - 1 xV94.2K(Siemens/Ansaldo)- 3 gasif.trains + 2 LTGC etc. - 2 gasif. + 1 LTGC etc. - 2 gasif. + 1 LTGC etc.

- Comm. op.: Jan.2001 - Comm. op.: April 2000 Comm. op.: July 2006

Projects OverviewProjects OverviewENI IGCCENI IGCCENI IGCCENI IGCC

EniPowerEni Gas & Power

Ansaldo-SiemensV94-3A.2

EniPowerEni Gas & PowerNatural gas (12.5 km new pipeline)

(400 MW)

Ansaldo-SiemensV94 3A 2V94-3A.2(400 MW)

A ld Si

Eni Refining & Marketing

G ifi i lH2 Ansaldo-SiemensV94-2K

(250 MW)

Gasification plant50 t/h Tar

H2

Syngas

Projects Overview ENI IGCCProjects Overview ENI IGCCCCU

SYNGASCCUPPU

T FU

HYD

TA

AC

I

R fi

TAR

UELG

AS

CW

DR

OG

EN

AIL G

AS

ID G

ASES

BD

MPS

DW BD

Refinery(FIRE WATER, IW, WATER TREAT., IA, SIGNAL EXCH., etc.)

Plant AvailabilityPlant AvailabilitySyngas ProductionSyngas ProductionSyngas ProductionSyngas Production

90%

100%

70%

80%

90%

ISAB Energystart-up 2000

50%

60% SARLUXstart-up 2001

ENI R&M

30%

40%

ENI R&Mstart-up 2006

10%

20%

0%I II III IV V VI VII VIII

Year of commercial operation

Shutdown Duration DistributionShutdown Duration Distribution

Planned

ISAB Energy gasification ENI R&M gasification

InstrumentationExternal

Planned23%

External , 16%

Planned, 36%

14%External

24%

C t 5%Mechanical

4%

Operational

Instrumentation, 4%Operational, 1%Common part, 5%

Operational16%

Common part19%

Mechanical, 38%

period: 2006 -2008period: 2003 -2008

GasificationGasification

• Saipem gasification plants have reached 94% of availability

• First year of operation availability enhanced to 74%

• First year performance to be increasedFirst year performance to be increased implementing feedback and lesson learnt to get 90% of availability during the first year Such results can be extended to coal• Such results can be extended to coal gasification

Gasification + CCSGasification + CCS

Next step: gasification + CCSNext step: gasification CCS• Many countries (EU, USA, Australia, Canada, New Zealand, Japan)

has introduced CO2 emission limit and/or capture & sequestration economic bonuseconomic bonus

• CCS application will develop following stringent trend of emission reduction regime

• Gasification is the “natural” technology for CCS concept application• Gasification is the natural technology for CCS concept application since pure (and dried) CO2 can be easily separated

• All major components of CCS technically proven and referenced (shift & AGR unit CO compression and liquefation transportation &(shift & AGR unit, CO2 compression and liquefation, transportation & storage)

• Storage and pipeline are the key factor for CCS economics

Hydrogen From GasificationHydrogen From Gasification

SULPHUR

H2 from gasification + CCS Process Block DiagramNITROGEN

AIRSEPARATION

UNIT

SULPHURRECOVERYAIR

OXYGEN

SULPHUR

GASIFICATION & SHIFTACID GASREMOVAL

ACID GAS

HYDROGEN

CARBON DIOXIDE

FILTRATION & CO2 PSA

SLAG & ASH

FEEDSTOCKSLAG / ASH

CARBON DIOXIDE

COMPRESSION& LIQUEFATION

FEEDSTOCK HANDLING TREATMENT

HYDROGEN

FILTER CAKE

TRANSPORTATION

INJECTION &= unit added for CCS application INJECTION & STORAGE

= unit added for CCS application

Power From GasificationPower From GasificationPower from gasification + CCS

Process Block Diagram

AIRSEPARATION

UNIT

SULPHURRECOVERYAIR

SULPHURNITROGEN

GASIFICATION & SHIFT ACID GASREMOVAL

ACID GASOXYGEN

POWER FILTRATION & CO2 SATURATION

SLAG & ASH

FEEDSTOCKSLAG / ASH

CARBON DIOXIDE

COMPRESSION& LIQUEFATION

FEEDSTOCK HANDLING TREATMENT

FILTER CAKE

TRANSPORTATION

INJECTION &= unit added for CCS application INJECTION & STORAGE

unit added for CCS application

= unit modified for CCS application

CCS Economical ImpactCCS Economical Impact

€/kg CO2

(low)

€/kg CO2

(high)

Notes

Gasification to

Hydrogen

9.3 14.5

Gasification to 24 29 2

CO2 delta cost: LOW case=

Availability of storage ready to

be fed and the shortGasification to

power

24 29.2 be fed and the short

transportation distance

Cost includes Capex and OpexNatural gas to

power

38.9 45.1 Cost includes Capex and Opex

1 Mt/year CO2 case study

based on in-house data

Location: Italy

Gasification + CCSGasification + CCS

European policyEuropean policy• European enviromental policy based on Emission

Trading Scheme (ETS)• ETS applied to european industrial and energy

installations (nationals quotes decided by centralized authority)authority)

• Allowances are allocated to industrial operators (CAP)• New stringent policy for 2013-2020 to be set on g p y

december 2009 (deviation foreseen)• Operators within ETS limit can trade the allowance• CAP will decrease starting 2012 increasing the price of

carbon trade

CCS PerspectiveCCS Perspective

Emissions vs EU Cap Trend

31003300

Emissions

2500270029003100

O2

EU CAP

1900210023002500

Mt C

15001700

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CCS PerspectiveCCS Perspective

CCS economical impact vs EUA EUAp

30 035,040,0

EUA

CCS (H2

10 015,020,025,030,0

€/kg

CO

2 plant) - lowcaseCCS (H2plant) high

0,05,0

10,0

008

008

008

009

009

009

011

013

015

017

020

€ plant) - highcaseCCS (powerplant) - low

02/01

/20002

/05/200

02/09

/20002

/01/200

02/05

/20002

/09/200

23/09

/20122

/10/201

21/11

/20120

/12/201

19/01

/202

date

caseCCS (powerplant) - highcasedate case

CCS PerspectiveCCS Perspective

• CCS applied to gasification is sustainable due to pp geuropean (and other countries) carbon emission policy

• CO2 emissions price forecast stable in future atCO2 emissions price forecast stable in future at high level due to limitation in GHG emission

• Capex difference between NGCC and IGCC d d ith CCS i l t tireduced with CCS implementation

• High impact of transportation and storage on CCS economicsCCS eco o cs

• Availability of onshore, exhausted wells close to the plant will drop the capex of CCS

CCS: Saipem ExperienceCCS: Saipem Experience

• Saipem built experience on the whole chain of p pCCS supporting ENI in the preparation of the CO2 injection in Cortemaggiore: scheduled start in 2010.

• Saipem services included:o Modeling / simulation of the diffusion of injected CO2 in the reservoir

using an in-house software (TMGAS).g ( )o Modeling / simulation of CO2 interaction with the caprock and the

wellbore cement using software validated on experimental results.o Coordination of caprock integrity studies to evaluate the risk of leakage.o Design /installment of a sub-surface tool for continuous monitoring ofo Design /installment of a sub surface tool for continuous monitoring of

CO2o Design of the surface facilities for storage/injection of CO2

CCS: Saipem ExperienceCCS: Saipem Experience

evolution of the CO2 plume in the reservoir in 2 years

• Start of CO2 injection on 2010:

o Three years of CO2 injectiono Two years of monitoring

ConclusionConclusion

• Lack of gasification plant availability was a significantLack of gasification plant availability was a significant hindrance for the gasification application in the power industry.

• Saipem has reached over 90% of availability on 3 IGCC plants in Italy for a total of 1.4 GWe installed

• Same results can be achieved in coal gasification: 90% of availability starting from first year of operation is a reachable targetTh t t f ifi ti i t d b th CCS• The next step of gasification is represented by the CCS implementation to permit the respect of new GHG emission policy of many countries

• The application of CCS would increase the cost of gasificationThe application of CCS would increase the cost of gasification products (power and hydrogen) to be recovered trading the CO2 allowance developed due to new environmental policy

ConclusionConclusion

• In European Community the forecast is to have CO2 emission price covering the investment for CCS unit starting 2013T t ti d t t t it• Transportation and storage represent an opportunity to reduce the capex and increase the economics of such technologyS i h l t d id i ti• Saipem has a complete and wide experience acting as a complete EPC contractor from gasification to CO2 storage passing through capture and transportationtransportation.

THANKS TO:THANKS TO:Claudio Allevi SarluxClaudio Allevi, Sarlux

Roberto Lavecchia, ENI Power;, ;

Raffaella Lucarno and Claudio Zanelli, ENI R&M;

G.Guarino and Daniele Castiglia, ISAB Energy;

THANK YOUTHANK YOU

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Fausto FerrariGasification Technology Manager

Phone: +39-02-52049841Phone: +39-02-52049841Fax: +39-02-52049834e-mail: fausto.ferrari@saipem.eni.it