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INDONESIAN

CCS-CCUS

Carbon Capture, Utilization & Storage

REPORT;

Potential & Opportunities

TABLE OF CONTENTS 02

Table of Content

04

List of Figures

06

List of Tables

07

EXECUTIVE SUMMARY

08

ABBREVIATIONS

09

INTRODUCTION

13

I. STATUS OF CCS/CCUS ACTIVITIES IN INDONESIA

15

I.1. Existing Regulations Managing CCS/CCUS

16

I.2. Regulatory Body for Monitoring

18

I.3. Studies on CO2 Source Potentials in Indonesia

21

2

II. PLANNED CCS/CCUS PROJECTS IN INDONESIA

21

II.1. CCUS EGR Gundih

24

II.2. CCSU EGR Tangguh

24

II.3. CCUS EOR Sukowati - Jambaran Tiung Biru

28

II.4. CCS Sakakemang

29

II.5 Abadi LNG CCS

32

II.6. Arun CCS

32

II.7. Jatibarang CCUS EOR

34

II.8. Merbau Limau Niru CCUS EOR

38

II.9. Natuna D-Alpha CCS

40

III. POTENTIAL LOCATIONS FOR CCS/CCUS PROJECTS IN INDONESIA

40

III.1 Fields Candidates for CO2 Injection

43

III.2 Provinces with biggest potentials for CCS/CCUS

48

IV. BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

52

IV.1. CCS/CCUS Projects Financiers

53

IV.2. Green LNG/Gas

54

IV.3. Commercial CCS Facilities

59

V. KEY DRIVERS OF CCUS PROJECT IN INDONESIA

62

V. 1. CO2 Storage Capacity

64

V. 2. Decarbonization/Carbon Neutral Target Timeline

68

VI. ISSUES AND CHALLENGES OF CCUS IN INDONESIA

68

VI.1. Technology Readiness (+CO2 EOR/EGR)

71

VI.2. Supporting Regulations and Policies

72

VI.3. Political Will

73

VII. REFERENCE

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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LIST OF FIGURES Figure 1 Draft of Presidential Regulation about Carbon Pricing

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Figure 2 Conceptual diagram of carbon capture and storage

10

Figure 3 Schematic of CO2 EOR

15

Figure 4 Supporting Regulations for GHG Emission Reduction in Indonesia

16

Figure 5 MEMR GHG Emission Mitigation Working Units Relationship

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Figure 6 Center of Excelence for CCS/CCUS in Indonesia

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Figure 7 Indonesia CO2 Source Distribution

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Figure 8 Potential CO2 Source Map of Selected Industries

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Figure 9 Location map of CCUS Gundih Pilot Project, Blora Regency, Central Java Province Figure 10 Location of the Gundih Area showing the three gas fields KTB, RBT, and KDL

22 23

Figure 11 Geographic location of the Sukowati field and the SWK-02 well in East Java basin

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Figure 12 Sukowati CO2-EOR Project

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Figure 13 Sukowati field milestone CO2 EOR project

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Figure 14 Conceptual model illustrating Sukowati CO2-EOR System

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Figure 15 Latest Status on Gundih and Sukowati CCS Project

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Figure 16 Sakakemang PSC

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Figure 17 CCS Project in Sakakemang Field

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Figure 18 Tangguh CCUS

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Figure 19 Emissions across various LNG Projects

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Figure 20 Various Oil and Gas Fields in onshore and offshore Northwest Java

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Figure 21 CO2 Separation Technology and EOR Pilot Project in Jatibarang Field

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Figure 22 CCUS Pilot Project in Merbau Field

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Figure 23 CO2 EOR potential of several Pertamina EP fields

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Figure 24 Source-sink matching for CO2-EOR sequestration pilot project in South Sumatera Basin Figure 25 CO2 sources around Limau-Niru fi eld

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36 38

Figure 26 East Natuna PSC

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Figure 27 CO2 Field Injection Candidates

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Figure 28 Gas Field Locations in West Java and South Sumatera for CO2 Storage

42

Figure 29 CCS Business Model Elements

51

Figure 30 Emissions across various LNG Projects

53

Figure 31 Industrial CCS Hubs

58

Figure 32 Diagram showing risk of leakage of Indonesian sedimentary basins

60

Figure 33 CO2 Geological Storage Capacity

63

Figure 34 Indonesia CO2 Storage Capacity Distribution

63

Figure 35 Energy Transition toward Net Zero Carbon (NZE)

64

Figure 36 Indonesia Emission Reduction Roadmap 2020 – 2035

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Figure 37 Nationally Determined Contribution 2030 Target for Energy Sector

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Figure 38 Impact of CCS to Capacity and Levelized Cost of Electricity (LCOE)

67

Figure 39 Total CCS Investments for South Sumatera and West Java Coal Power Plant

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Figure 40 Illustration of Carbon Dioxide-Enhanced Oil Recovery

69

Figure 41 Oil Production Outlook

69

Figure 42 CO2 EOR Key Technical Aspects

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Figure 43 CO2 EOR Potential Production 2020 – 2060

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Figure 44 Draft of Presidential Regulation about Carbon Pricing

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Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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LIST OF TABLES Table 1 Summary of status CCS/CCSU projects in Indonesia

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Table 2 CO2 Content of Several Oil and Gas Fields based on Directorate General Oil and Gas Data

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Table 3 Anthropogenic Sources of Carbon Dioxide in Indonesia

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Table 4 Carbon-Neutral LNG Deal List

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Table 5 CO2 emissions from selected industrial activities in South Sumatera region

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Table 6 Pairing of Carbon Dioxide Sources and Candidate Oilfi elds for Carbon Dioxide Enhanced Oil Recovery in Indonesia

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Table 7 List of CO2 Field Injection Candidates

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Table 8 Examples of Various Hub and Cluster models of CCUS

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Table9 Carbon-Neutral LNG Deal List

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Table 10 Operational CCS Facilities Around the Globe

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Table 11 CO2 Storage Screening Criteria

61

Table 12 ISO 27914 for CCS and ISO 27916 for CCUS

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Table 13 EOR Gas Injection Activities in Indonesia

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EXECUTIVE SUMMARY

Carbon capture, utilisation and storage, or CCUS, is an important emissions reduction technology that can be applied across the energy system. CCUS technologies involve the capture of carbon dioxide (CO2) from fuel combustion or industrial processes, the transport of this CO2 via ship or pipeline, and either its use as a resource to create valuable products or services or its permanent storage deep underground in geological formations. CCUS technologies also provide the foundation for carbon removal or “negative emissions” when the CO2 comes from bio-based processes or directly from the atmosphere. CCUS will play crucial role for the world in achieving its climate reduction

targets as it allow a direct impact to CO2 presence in atmosphere. However the efforts of sequestration require investment and finding the right mechanism to repay this investment remains a challenging task to resolve. The question on how to make CCUS activities economically feasible does not only persist in other countries but in Indonesia as well. This report though, view CCUS as important venture for everyone and thus try to provide information and data, especially locations that fit for sequestration. This report will explain the current status of CCUS/CCS in Indonesia, plans that has been laid on, plans from government to issue regulations, potential locations and players that have shown interest on CCUS/CCS.

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ABBREVATIONS ADB CCS CCUS CoE EGR EOR EPCI GHG ITB KUP LEMIGAS MEMR MEF NDC NZE UNFCC

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: Asian Development Bank : Carbon Capture and Storage : Carbon Capture, Utilization, and Storage : Center of Excellence : Enhanced Gas Recovery : Enhanced Oil Recovery : Engineering, Procurement, Construction, and Installation : Greenhouse Gases : Institut Teknologi Bandung : Ketentuan Umum dan Tata Cara Perpajakan : Lembaga Minyak dan Gas Bumi (Indonesian Research and Development Centre for Oil and Gas Technology) : Ministry of Energy and Mineral Resources : Ministry of Environment and Forestry : Nationally Determined Contribution : Net Zero Emission : United Nations Framework Convention on Climate Change

INTRODUCTION In November 19, 2020, the Indonesian government issued the latest draft of Presidential Regulation about Carbon Pricing as can be seen in Figure 1. The goal of this regulation is to become a guidance of carbon pricing implementation to achieve greenhouse gases (GHG) emission reduction and to increase climate resiliency toward government commitment on Nationally Determined Contribution (NDC) as the foundation for low carbon development. The government aim to achieve GHG emission reduction by 29% to 41% in 2030 compared to business as usual circumstance.

Figure 1 Draft of Presidential Regulation about Carbon Pricing

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INTRODUCTION

Targeted sector for climate change mitigation is as follow: 1. Energy 2. Waste 3. Industrial process and fertilizer 4. Agriculture 5. Forestry 6. Other related sectors The sector is not limited to the targeted only, but also include sub-sectors such as power plant, transportation, industry, buildings, farming, stockbreeding, plantation, forestry, solid waste, liquid waste, municipal waste, and other related sub-sectors. This regulation will play a crucial role for setting up Indonesia’s emission

trading foundation as it will allow the economic valuation of carbon. When carbon trading is allowed, we predict CCUS/CCS in Indonesia will become more interesting as it values CO2 that are captured. This regulation however, will need more technical regulations that should be issued by technical ministries including Ministry of Energy & Mineral Resources, Ministry of Industry and Ministry of Environment & Forestry. CCS/CCUS could be considered as a bridging technology which allows the continued use of fossil fuels in electricity generation and industry until low-carbon alternatives can be implemented. CCS may also important

Figure 2 Conceptual diagram of carbon capture and storage (Letcher, 2020)

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to achieve the negative CO2 emissions to a CO2 pipeline or other required for the 1.5 °C and 2 °C transportation system; climate goals. In order to significantly 4. All required environmental, safety, reduce carbon emissions through CCS, and other approvals have been huge amounts of CO2 will need to be identified; captured and stored. 5. Public awareness and engagement activities related to potential CCS operations consist of three future capture facilities have been major element: CO2 capture at a large performed; stationary source (e.g., natural gas processing, coal-fired power plant, and industry), transport of the captured CO2 to a storage site, and injection of CO2 into the subsurface for permanent storage. Referring to Global CCS Institute, the definition of a CCS Ready plant is one that is Capture Ready, Transport Ready, and Storage Ready.

A CO2 Capture Ready plant satisfies all or some of the following criteria:

6. Sources for equipment, materials, and services for future plant retrofit and capture operations have been identified; and Capture Readiness is maintained or improved over time as documented in reports and records. A CO2 Transport Ready plant satisfies all or some of the following criteria:

1. Sited such that transport and storage of captured volumes are technically feasible;

1. Potential transport methods are technically capable of transporting captured CO2 from the source(s) to geologic storage ready site(s) at an acceptable economic cost;

2. Technically capable of being retrofitted for CO2 capture using one or more reasonable choices of technology at an acceptable economic cost;

2. Transport routes are feasible, rights of way can be obtained, and any conflicting surface and subsurface land uses have been identified and/ or resolved;

3. Adequate space allowance has been made for the future addition of CO2 capture-related equipment, retrofit construction, and delivery

3. All required environmental, safety, and other approvals for transport have been identified;

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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INTRODUCTION

4. Public awareness and engagement activities related to potential future transportation have been performed; 5. Sources for equipment, materials, and services for future transport operations have been identified; and

and services for future injection and storage operations have been identified; and 7. Storage Readiness is maintained or improved over time as documented in reports and records.

This report will provide update and 6. Transport Readiness is maintained analysis on Carbon Capture and or improved over time as Storage (CCS) and/or Carbon Capture, documented in reports and records. Utilization, and Storage (CCUS) in Indonesia as a part of GHG emission A CO2 Storage Ready plant satisfies reduction and climate mitigation technology in the energy sector. all or some of the following criteria: The mechanism of CCS/CCUS in Indonesia works similarly with those 1. One or more storage sites have in other countries where CCS/CCUS’ been identified that are technically main objective is to capture CO2 capable of, and commercially accessible for, geological storage of and utilize for other means or store it full volumes of captured CO2, at an underground. The conceptual diagram of carbon capture and storage can acceptable economic cost; be seen in Figure 2. This report will 2. Adequate capacity, injectivity, and also explain to you the latest CCS/ storage integrity have been shown CCUS progress in Indonesia, where to exist at the storage site(s); the government has been working on the regulations and who has been 3. Any conflicting surface and subsurface land uses at the storage interested to build. site(s) have been identified and/or resolved; 4. All required environmental, safety, and other approvals have been identified; 5. Public awareness and engagement activities related to potential future storage have been performed; 6. Sources for equipment, materials,

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1

STATUS OF CCS/CCUS ACTIVITIES IN INDONESIA since December 2021. A top official at the MEMR said that the government mulls to give higher production split as incentive for oil-gas blocks that implement CCS/CCSU. There are four CCS/CCSU projects that currently being planned and has specific time target. All of them coming from oil-gas stakeholders. They are:

As of January 2022 there is no yet specific regulation that oversees carbon sequestration in Indonesia. There is one existing regulation, issued by SKK Migas named PTK0 58/SKKO0000/2015/S0, that supervises injection of chemicals as for enhancing oil production (EOR). This regulation however is very limited to the operation of fluids injection (steam, water, or CO2) to boost production in fields that are entering mature phase (tertiary recovery), and not mentioning if the fluids comes from carbon sequestration. In January 2022, MEMR was in the process of drafting a regulation that will manage the CCS/ CCSU activity in oil-gas sector. The drafting process has been started

1. CCSU Gundih. Gundih CCSU plan will utilize CO2 produced from gas refining facility to be injected in Enhanced Oil Recovery Program. Gundih CCSU plan has finished feasibility study in 2021. In 2022, the study is expected to be detailed and more specified before it goes to funder for financing approval. The study is conducted by ITB Center of Excellence CCS/ CCUS, J-Power & Janus, currently in feasibility study. Gundih field will utilize MRV (Measurement, Reporting, and Verification) CCUS/ CO2-EOR Method by Japex and Center of Excellence CCS/CCUS LEMIGAS. 2. CCSU Tangguh /CO2-EGR by BP Berau Ltd. & ITB. As of January 2022, the block is preparing Front End Engineering Design (FEED). Tangguh CCSU is expected can be

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STATUS OF CCS/CCUS ACTIVITIES IN INDONESIA

operational in 2026. 3. CCSU Sukowati. CCSU Sukowati, CO2-EOR Sukowati field by Pertamina EP, supported by Japex and LEMIGAS, currently in feasibility study. Sukowati CCSU project is targeted can be operational in 2026-2027. 4. CCS Sakakemang in 2027. 5. CCS Arun in 2028. 6. CCSU EOR Ramba Field in 2030. The Indonesian government estimated circa 48 million tons of CO2 reduction

will be achieved from Gundih, Sukowati, and Tangguh CCUS projects. Gundih will have potential production increase for gas circa16 BSCF, while for condensate crica 357 MSTB. Sukowati is estimated to achieve up to 10,000 BOPD with CCUS project implementation. Tangguh’s gas production will reach 200 BSCF and condensate production will reach 308 MSTB with CCUS project implementation. The other CCS/CCSU plans that potentially to follow:

Table 1 Summary of status CCS/CCSU projects in Indonesia No.

Project

Conducted by

Status

On Stream Target Schedule

2026

25 million tCO2 for 10 yrs

2024/2025

3 million tCO2 for 10 yrs

• Pilot tes 2026/2027 • Full Scale : 2030

15 million tCO2 for 24 yrs

2027

35 million tCO2 for 15 yrs

CO2 Stored Potential

Tangguh EGR

bp Berau Ltd.

FEED Preparation Pre-Feasibility Study has been conducted with ITB on Sep 2020April 2021, POD II Updated Has been approved

2

Gundih CCUS/CO2-EGR

Pertamiona , CoE ITB, JGC, J-Power, Janus,& Supported by METI Japan

Pre-FEED Study toward to Gundih CCUS Project

3

Sukowati CO2-EOR

• Subsurface study by Pertamina Pertamina, LEMIGAS, • Study CO2-EOR as CCUS by JAPEX & Supported Pertamina, LEMIGAS, JAPEX & by METI Japan Supported by METI Japan

4

CCS Sakakemang

Repsol Sakakemang B.V.

Internal dIsucussion in Repsol

5

Abadi CCS/CCUS

Inpex Masela Ltd.

Internal discussin in Inpex

-

70 million ton of Native CO2 by 2055

6

CCS Joint Study for Clean Fuel Ammonia Production in Central Sulawesi

PT. Panca Amara Utama, JOGMEC, Mitsubishi & ITB

Pre-Feasibility Study has been started from 29 Oct 2021 until 30 June 2022

-

10 million tCO2 for 10 yrs

7

East Kalimantan CCS/ CCUS Study

PT. Kaltim Parna Industri & ITB

Pre-Feasibility Study has been started from 1 Nov 2021 until 28 Feb 2022

-

10 million tCO2 for 10 yrs

8

Study of CCUS for Coal to DME

PT. Pertamina (Persero) & ITB

Pre-Feasibility Study has been conducted from July 2021 - Oct 2021

-

13-65 million tCO2 for 10 yrs, depends on scenarios

9

Arun CCS/CCUS

ODIN Reservoir Consultan & PEMA

Preparing for Join Feasibility Study (Expected to be started in 2022

1

14

2028

-

1. CCS/CCSU Abadi Masela Block 2. CCS PAU Ammonia 3. CCS/CCSU Kaltim Parna Industri 4. CCSU Coal DME Pertamina Most of CCUS projects in Indonesia are aimed to increase the oil and/ or gas production. The captured CO2 will be injected to the reservoir to push the oil and/or gas flow through the production well. Some CO2 may be detected in the separator tank which will be reinjected to the reservoir. The simplified schematic of CO2 EOR can be seen in Figure 2. In the future, CCUS/CO2-EOR or CO2-EGR will be considered as an imperative action to reduce carbon emission beside oil and gas sector. I. 1. Existing Regulations Managing CCS/CCUS Since 2007, there is only one regulation that supervises CO2 injection to subsurface, which is Ministry of Environment and Forestry (MEF) Regulation Number 13 of the year of 2007 about Requirement and Guidance of Waste Water Management for Upstream Oil, Gas, and Geothermal through Injection. Unfortunately the

Figure 3 Schematic of CO2 EOR

regulation did not provide specific guidance for carbon dioxide injection. The key barrier to CCS in Indonesia as in other countries is lack of regulation in place for CCS operations that will be required to give the confidence to investors and project developers in Indonesia and to give the public confidence in the safety and security of the operations. Up to now, Indonesia does not have the legal and regulatory framework to fully enable deployment of CCS. However, there may be existing regulation such as one environmental regulation under review that may be adapted and tailored to suit CCS which focuses on the utilization of the subsurface for waste storage. This Ministry Regulation No.13 year 2007, sets out requirements and procedures for waste

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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STATUS OF CCS/CCUS ACTIVITIES IN INDONESIA

Global Commitment: Paris Agreement targets: Keeping global temperature rise not exceeding 2°C, and working towards 1.5°C

National Commitment: 0DQGDWHRI/DZ1RRIFRQFHUQLQJ5DWLĆFDWLRQRIWKH3DULV$JUHHPHQW 5HGXFLQJ*+*HPLVVLRQVDFFRUGLQJWRWKH1'&E\

Energy Sector Commitments: 5HGXFH*+*HPLVVLRQVE\0LOOLRQ7RQVRI&2E\ *51XPEHURQ.(1 3UHVLGHQWLDO5HJ1XPEHU 20,000 MMscf The parameter of industrial CO2 source is > 1,500 T CO2/day. The industry are consist of cement, petrochemical, coal mining, and pulp industries. While for coal-fired power plant, the parameter is as follow: a. Low: < 1 million T CO2e b. Medium: 1 - 2 million T CO2e

Overview of Potential CO2 Source Map (Sumatera, Java, Kalimantan) CO2 Source (subject tobe discussed) • The Oil-Gas CO2 is calculated by CO2 content (%) x remaining gas reserve (mmscf) • Low CO2: < 5,000 mmscf • Medium CO2: 5,000 –20,000 mmscf • High CO2: > 20,000 mmscf • Industrial CO2: from Cement Industry, Petrochemical, Coal Mining, Pulp Industries (>1,500 TCO2/day) • Power Plant (coal) CO2is classiĆed as: • Low: 2 mioTCO2e With a supervision & sponsor from

Hub-Clustering have been done in Gas Fields, Industry, and Coal Power Plant - Note that the CO2 unit available from oil&gas in database is volume (mmscf gas) not ćowrate (mmscfd or mmscfy) - Blue hexagon = CO2-rich industry, Red Squares = high CO2 produced from Power Plant.

Figure 8 Potential CO2 Source Map of Selected Industries (Sule, 2020)

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STATUS OF CCS/CCUS ACTIVITIES IN INDONESIA

c. High: > 2 million T CO2e Refers to ADB report about Carbon Dioxide-Enhanced Oil Recovery in Indonesia in 2019, the anthropogenic source of carbon dioxide in Indonesia are natural gas processing, oil and LNG processing, power plants, chemical plants and flared gas. The report has a common information regarding CO2 emission in oil and gas fields include Tangguh LNG plant. But it added some other potential CO2 sources such as oil refineries, LNG plants, power plants, chemical plants, and flared gas as can be seen in Table 2. The LNG plants consists of Arun LNG Terminal and Badak NGL. The oil refineries which belongs to Pertamina

are located in Sungai Pakning, Cilacap, Balikpapan, and Balongan. The power plants are located in Bangko Tengah, Muara Tawar, Indramayu, and Muara Jawa. Power plants has the highest estimated emission by 115 MMT per year. The chemical plants includes fertilizer (ASEAN & PIM, Pupuk Sriwijaya, Pupuk Kujang, and Pupuk Kaltim), methanol (Bunyu), petrochemical (Petrokimia Gresik), olefin RU IV Pertamina Cilacap), polypropylene (RU III Pertamina Plaju), and purified terephthalate acid (RU III Pertamina Plaju). ADB also add flared from various offshore gas blocks.

Table 3 Anthropogenic Sources of Carbon Dioxide in Indonesia Source Natural gas processing

Estimated Emissions (MMT/year)

Examples

2.8

Subang, Merbau, Cilamaya, Gundih, JTB

Oil and LNG processing

17.3

LNG: Arun, Badak, Tangguh Refineries : Sungai Paknik, Cilacap, Balikpapan, Balong

Power Plants

115.0

Bangko Tengah, Muara Tawar, Indramayu, Muara Jawa

No estimate available

Fertilizer plants: ASEAN & PIM, Pusri, Kujang, Kaltim Methanol plants: Bunyu Petrochemicals: Gresik Olefin centre: UP.IV Pertamina Cilacap Polypropylene: UP.III Pertamina Plaju Purified terephthalate acid: UP.III Pertamina Plaju

Chemical plants

Flared gas

7.9

Offshore gas blocks

ASEAN = PT Asean Aceh Fertilizer (AAF), JTB = Jambaran-Tiung-Biru gas fields, LNG = liquified natural gas, MMT = million metric ton, PIM = PT Pupuk Iskandar Muda, UP.III = Unit Pengelolaan III (Development Unit III), UP.IV = Unit Pengelolaan IV (Development Unit IV). Source: Battelle analysis based on Muslim et al. 2013. Opportunities and Challenges of CO2 Flooding in Indonesia. Paper presented at the Society of Petroleum Engineers Asia Pacific Oil and Gas Conference and Exhibition. Jakarta. 23-24 October. https://www.academia. edu/10778808/Opportunities_and_Challenges_of_CO2-EOR_in_Indonesia.

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II

PLANNED CCS/CCUS PROJECTS IN INDONESIA

At the moment, CCS/CCUS projects in Indonesia are sitting in the planned stage under various phases. The most progressing project is Gundih CCUS where all parties involved has signed Joint Study Agreement (JSA) in June 2021, while the rest of carbon capture plans in Indonesia waiting for technical and commercial regulations that will allow the activities. II. 1. CCUS EGR Gundih Current Status: Detailed study to be finalized in 2022 Gundih CCSU plan will utilize CO2 produced from gas refining facility to be injected in Enhanced Oil Recovery Program. Gundih CCSU plan has finished feasibility study in 2021. In 2022, the study is expected to be detailed and more specified before it goes to funder for financing approval. Gundih field is located in onshore

Central Java province, owned and operated by PT. Pertamina EP. The latest update from Gundih CCSU plan is the study will be Gundih field has been producing oil and gas since 2015. In 2020 Gundih field produced around 2000 BOPD and 60-70 MMSCFD of gas where the output then is processed at Gundih Central Processing Plant (CPP) which is located nearby the field. Gundih’s output has 21%-23% content of CO2, emitting about 800 tons CO2 per day. The initiative to capture and utilize

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PLANNED CCS/CCUS PROJECTS IN INDONESIA

Gundih’s CO2 began in 2014 from a research program called SATREPS that is supported by JICA/JST, where Japanese and Indonesian scientists conducted studies on environment/ climate change which then concluded into carbon capture. When operational, the Gundih CCUS plant is expected to absorb 3 million tons CO2 for 10 years duration. The project plans to use highly corrosion resistant pipelines to transport separated CO2 at a volume of 800 tonnes/day that consists of about 97% of CO2 and impurities (including about 2.5% of H2S) to be injected into Kujung Formation within the Kedungtuban Structure at a depth of 2,778.5 - 3,285.1 m; 4 km to the east from the CPP with the injection period of ten years as can be seen in

Figure 9 Location map of CCUS Gundih Pilot Project, Blora Regency, Central Java Province (Mulyasari, Harahap, Rio, Sule, & Kadir, 2021)

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Figure 7. The carbon captured from the Central Processing Plant will be used for enhanced gas recovery program at gas fields in the Gundih area that is expected to increase gas production by around 5.4 percent, or 36 bscf for 10 years duration. Gundih latest progress was the signing of Joint Study Agreement between Pertamina and Japan Nus Co Ltd, JGC Corporation and J-Power, and the Bandung-based ITB University in June 2021. Gundih project is likely to be the first commercially carbon capture project in Indonesia in the nearest future. The location for the proposed injection wells for Gundih CCUS pilot project is comprised of three separate gas fields such as KTB (Kedung Tuban), RBT (Randu Blatung), and KDL (Kedung Lusi), developed in the Kujung Formation. These fields can be seen in Figure 7. The CCS pilot project has been started in 2012 which involving many key players such as ADB, Global CCS Institute, Norwegian Embassy, Kanso Technos, SKK Migas, Ristekdikti, Ministry of Energy and Mineral Resources, JST, JICA, Pertamina, Ministry of Environment and Forestry, and ITB. Each stakeholder in his project has different roles in Gundih CCS Pilot project. MEMR’s job is supervise the study conducted by ITB and

Pertamina. METI roles are supervise the Japan team and direct relation with MEMR. The Japan team roles are provide EPC, CAPEX, and CO2 monitoring. ITB in this case act as the Center of Excellence for CCS/CCUS in Indonesia which will interact with various players to generate report. Pertamina, operator of Gundih field, roles are provide OPEX and risk assessment. Figure 10 Location of the Gundih Area showing the three gas fields KTB, RBT, and KDL (Kelly, Main, Jackman, & Lundeen, 2019)

MRV CCUS/CO2-EOR MRV stands for measurement, reporting, and verification. According to ADB, the MRV plan is a pivotal tool for operators of CO2-EOR+ projects to proactively manage the project risk. It is typically developed in consultation with regulatory authorities and lenders. The main concern is about reservoir zone monitoring. Especially tracking the pressure, temperature, and the flow of CO2. If there is any sign of leak, the second tier of monitoring for leakage detection and management would be implemented by monitoring above the reservoir zone, and, at the third tier, near-surface and surface monitoring would be carried out. The MRV activities are as follow: 1. Additional site characterization and risk assessment to collect information on geological formations, as well as abandoned

wells, to assess the potential for leakage of CO2 from the reservoir; 2. Additional measurement of venting and fugitive emissions from surface processing equipment; 3. Enhanced monitoring and surveillance of the field to identify and, if necessary, estimate leakage rates; and 4. Changes to abandonment processes, such as more robust sealing off of the well, including the removal of the uppermost components of wells so they can withstand the corrosive effects of CO2-water mixtures to ensure that the CO2 is stored permanently in the reservoir and does not leak out over time.

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PLANNED CCS/CCUS PROJECTS IN INDONESIA

II.2. CCSU EGR Tangguh Current Status: As of January 2022, the block is preparing Front End Engineering Design (FEED). In August 2021, bp the operator of the Berau, Muturi and Wiriagar PSC, has secured approval from SKK Migas for POD of three blocks it operates. The POD of these fields will utilize Carbon capture, Utilization and Storage (CCUS) to support enhanced gas recovery and at the same time reduce the fields’ carbon footprint. Based on the PoD, Ubadari and Vorwata EGR will produce 1,269 BCF and 3.77 million barrels of condensate until the PSCs’ contracts expire in 2035. According to SKK Migas, Ubadari is targeted to come onstream in the third quarter of 2026, followed by Vorwata in 2027. Investment required to develop the fields is estimated at US$ 2.041 billion. According to SKK Migas, Tangguh Train-1 and 2 currently release 5 million tons of CO2 annually and will increase to 8 MTPA without CCUS application with the operations of Train-3. CCSS application will cut CO2 release by 45 percent. Tangguh CCSU facility is expected can capture and store 25 million tons CO2 for 10 years. Tangguh LNG plans to sequester CO2 emitted from its liquefaction plants and utilize it to increase production.

24

Tangguh LNG currently emits around 5 million tons of CO2 per year and is estimated to increase up to 8 million tons CO2 when train 3 operational. Internal preliminary study shows that the EGR-CCUS could add reserves about 200 billion cubic feet with 30 million tons of CO2 being sequestered until 2035. Tangguh Train 3 is expected to be operational in 2022 with similar capacity with Train 1 and Train 2 of 3,8 million tons of LNG, making Tangguh total capacity 11,4 million tons LNG in 2022. Tangguh CCUS program is planned to absorb around 3 million tons CO2 annually starting from 2026. The FID of the CCUS program will be submitted in 2023. The gas sources are Berau PSC, Muturi PSC, and Wiriagar PSC which operated by BP (Berau) Ltd. II.3. CCUS EOR Sukowati Jambaran Tiung Biru Current Status: In 2022, Pertamina to do subsurface study while CO2EOR study to be conducted by Pertamina, Lemigas, Japex and METI Japan. Pertamina plans to do another CCUS project in East Java province by injecting CO2 to increase production in Sukowati field. Source of the CO2 will come from Jambaran Tiung Biru (JTB) processing plant. JTB processing plant will process inputs from Jambaran field

that is located within Cepu PSC and Tiung Biru field that is within PEP PSC. As of August 2021, JTB plant is under construction and scheduled to be completed by the end of 2021. Jambaran and Tiung Biru fields are managed under one umbrella of management consists of Pertamina, ExxonMobil and BKS Cepu.

Figure 11 Geographic location of the Sukowati field and the SWK-02 well in East Java basin (Kelly, Main, Jackman, & Lundeen, 2019)

Sukowati CO2-EOR Project GIYANTI

EAST JAVA

CENTRAL JAVA CEPU

KALISARI

20

PILANG

BANYU URIP prox32 KM Ap

KM

40 KM

KEDUNG LUSI

KEDUNG TUBAN RANDU BLATUNG

N

DISCOVERIES Cepu PSC 3D seismic survey

Oil & Gas Oil

30

Key Lead

0

Gas

J

5

BOJONEGORO

10

E

30 km

A

Kilometer

SUKOWATI

KM NAMPAK

x ALAS pTUA pro WEST

W

• •

GREATER ALAS TUA EAST

JEMBARAN - TIUNG BIRU

PROSPECTS & LEADS

Sink (Sukowati Oil Field)

KEDUNG KERIS

CENDANA

Pilot CO2 Injection: 250 ton/day (5 MMSCFD) CO2 for 1 year Full-scale Project: 5500 ton/day (100 MMSCFD) CO2

The distance Sukowati oil Ćeld to Jambaran Tiung Biru gas Ćeld about 30km. CO2 Potential based on PEPC study: ý Gas Production plateau is 315 MMSCFD for 15 years ý 30% CO2 Content, thus CO2 potential is 110 MMSCFD for 15 years

Source (Jambaran Tiung Biru Gas Field)

Milestone Sukowati CO2 EOR Project Pilot Injeksi CO2 (EPCI, Injesi & Monitoring)

Jul 2028

1st Full-Scale CO2 Injection

Jan 2022

2020

2021

2022

2023

2024

2025

2028

Jan 2020 • Studi Lab CO2 • Corossion Study

Jul 2021

Studi Pre-FEED

Jul 2023

POD, FEED,FID

Aug 2020

Jan 2025

Full-Scale Project Implementation (EPCI, Driling, WO)

Subsurface Study

Figure 12 Sukowati CO2-EOR Project (Wibowo A. , 2020)

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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PLANNED CCS/CCUS PROJECTS IN INDONESIA

EKSISTING

PLANNING Jan 2023

Project Implementation (EPCI, Driling, WO)

Jan 2022 May 2018

POD ,FID, FEED, Procurement

Alih kelola ke PEP

2018

2019

2020

2022

2021

2023

2024

2025

2026

Oct 2020 Micro Pilot CO2

Jan 2019 Studi Lab CO2 (RTC)

Jan 2020

Jan 2026

Study Pre-FEED

1 Full-Field Injection st

Mar 2019 Subsurface Study

Figure 13 Sukowati field milestone CO2 EOR project (SKK Migas, 2019)

Sukowati field is currently operated by PT Pertamina EP Asset 4 and producing around 8450 BOPD. Sukowati is a carbonate oil-bearing reservoir discovered in 2001 and estimated to have oil reserves around 308 million STB and has 20%–25% CO2 and 3%–4% H2S. Sukowati has produced more than 100 million barrels as of December 2020. Sukowati field was previously operated by Joint Operating Body (JOB) Pertamina PetroChina East Java (PPEJ) until completely taken over by Pertamina alone in mid-2018. Reservoir depth is about 6,300 ft TVDSS with an initial reservoir pressure of 2,800 psi. The peak of oil production is achieved in 2011 at 45,000 barrels

26

per day while it currently stands at 11,000 barrels per day of oil, gas production of 15 million cubic feet per day of gas and 18,000 barrels of water per day. The CO2 content is circa 20-25% by mass which is currently being transported to the Mudi central processing area (CPA) for venting. The recovery factor from the field is about 36% with an average reservoir pressure of 2,651 psi. Pertamina EP’s proposed CO2-EOR project in the Sukowati pilot project was began in 2020, with projection to scaling up to a full-field application six years later. The CO2-EOR pilot project will use the CO2 produced during oil and gas production from the Sukowati. The full-field CO2-EOR project would

involve the capture of CO2 from the Jambaran Tiung Biru (JTB) natural gas field. The distance between Sukowati and JTB is circa 30 km. Gas production from JTB field is anticipated from 2022 onward and will be the single largest source of CO2 from Pertamina EP activities once it reaches the full-scale operations. The plateau for gas production of JTB field is 315 MMscfd for 15 years. The Sukowati field is located close to several anthropogenic CO2 sources, the JTB gas processing facility being the most significant one. The detail on Sukowati CO2-EOR project can be seen in Figure 14. According to preliminary information provided by Pertamina EP, CO2-EOR is anticipated to improve recovery from the Sukowati by producing an estimated 50 million additional barrels (16.82%) of oil. Sukowati’s estimated CO2 storage capacity is ranging from a minimum of 3.4 billion tonnes to as much as 8.6 billion tonnes of CO2. Sukowati CCUS project is targeted to achieve circa 15 million tons CO2 stored in 25 years. The conceptual model of CO2-EOR system can be seen in Figure 11. The latest update on Sukowati CCS project is provided by Dewi Mersitarini, Advisor I Carbon Capture & Storage Research at RTC Pertamina in a recent webinar. She explained that the agreement between Pertamina

Figure 14 Conceptual model illustrating Sukowati CO2-EOR System (Kelly, Main, Jackman, & Lundeen, 2019)

and Japanese partners to develop Sukowati (CCS project) has been signed. The project is targeted to be implemented in 2028/2030. According to Dewi’s presentation, the Sukowati CCS project will begin the pilot phase EPCI in 2022 until 2024 and later in 2025-2028 it will enter the full scale EPCI. Jambaran Tiung Biru CO2 Capture JTB fields has 35% of CO2 content. The fields are estimated to have a plateau gas production at 315 MMscfd for 15 years and are expected to commence the gas production in 2022.

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

27

PLANNED CCS/CCUS PROJECTS IN INDONESIA

JTB processing plant, of which construction is underway could provide supply 2 MMT/ year of CO2. The map of Sukowati and Jambaran Tiung Biru Carbon Dioxide - Enhanced Oil Recovery Pilot Project can be seen in Figure 13

Figure 15 Latest Status on Gundih and Sukowati CCS Project

II.4. CCS Sakakemang Current Status: Repsol had completed site selection and plans to submit FID soon

Figure 16 Sakakemang PSC

28

The Sakakemang PSC contains the Kali Berau Dalam gas discovery. The block is located onshore South Sumatra, Indonesia, within 25 kilometres from gas infrastructure in the neighboring Corridor PSC, giving access to the Sumatra, Java and Singapore gas markets. Sakakemang’s operator Repsol, holds a 45% working interest in the Corridor PSC. The Kali Berau Dalam discovery was announced

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

Emissions intensity estimation

Peer 1 Peer 2 Repsol Now Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 Peer 19 Peer 20 Peer 21 Peer 22 Peer 23 Peer 24 Repsol 2025

in February 2019. High grading portfolio supporting carbon intensity reduction The well KBD-2X Repsol to become tier 1 lower carbon intensity High growth new barrels with lower has an estimated with a 75% reduction emission intensity 2 trillion cubic feet Emission intensity per barrel produced (kgCO2/boe) New production pushes down emissions intensity (TCF) of recoverable Tier 3 (>40) Tier 2 (>20) Tier 1 ( 300 MMSTB Subang Gas Plant

CO2 Volume

320 t/d (6 MMSCFD)

OOIP CO2 Source

150 - 300 MMSTB Subang Gas Plant

CO2 Rate

1000 t/d (20MMSCFD)

Jatibarang OOIP CO2 Source

> 300 MMSTB Subang Gas Plant

CO2 Rate

1000 t/d (20MMSCFD)

Figure 23 CO2 EOR potential of several Pertamina EP fields (SKK Migas, 2019)

Beringin OOIP CO2 Source

< 150 MMSTB Merbau Gas Plant

CO2 Volume

320 t/d (6MMSCFD)

tons (79 tons/day) of almost pure CO2 in 2016. All of the CO2 is currently vented to the atmosphere. The pilot project envisages that 75 tons/day of this CO2 would be liquefied/chilled and then transported by road tanker to the Beringin oilfield located 65 km away. Existing wells at the field would be modified to create one injection well and four producing wells. It is envisaged that injection would last for 5 years, boosting the recovery factor at the field by 1.4 percentage points to around 3.4% and yielding around 53,000 extra barrels of oil. The process would be immiscible (i.e., not involving any mixing of the CO2 and oil), as the pressure in the reservoir is not high enough and the oil too heavy to permit any significant degree of miscibility. After 5 years, it is estimated that around 90,000 tons of CO2 would be retained (stored) in the field.

Sukowati OOIP CO2 Source

150 - 300 MMSTB Jamaran Tiung Biru Gas Field

CO2 Rate

5500 t/d (100MMSCFD)

Refers to Usman et al, 2014, CO2 source-sink match is a method to matching the CO2 source and reservoir (sink) by scoring and ranking of sources and sinks using criteria specifically developed for CO2 EOR and sequestration. The method consists of three steps, such as selecting the best CO2 sources, selecting the suitable sinks, and making links for source and sink. The top candidate of CO2 sources are matched to several best sinks that correspond to added value, timing, injectivity, containment, and proximity. Approach to pairing the CO2 captured from industrial activities with oil reservoirs in South Sumatra basin for pilot project.

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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PLANNED CCS/CCUS PROJECTS IN INDONESIA

The identified major CO2 point sources in South Sumatera include power plants, petroleum refinery and gas processing facilities (gas gathering station - GGS), cement plants, and fertilizer-producing facilities. The GGS emerged as the most desirable capture source with a score more than double that of the second most attractive source as can be seen in Table 5. The facility’s high ranking appears to have been the result of its (i) proximity to storage, (ii) high purity CO2 stream from the GGS exhaust, (iii) relatively

new built facility, and (iv) sufficient CO2 to support a CO2 EOR sequestration pilot project, Table 5 CO2 emissions from selected industrial activities in South Sumatera region CO2 (tonnes/ year)

CO2 Source

Method

Power plant (multiple sources)

Fuel combustion

Onshore

(IPCC 2006 and Data Survey 2012)

1,786,062

Onshore

Petroleum refinery (single source)

Data Survey 2012

619,527

Gas gathering station (single source)

Data Survey 2012

132,754

Cement plant (single source)

Data Survey 2012

500,760

Fertilizer plant (single source)

Data Survey 2012

2,506,652

Total

5,545,755

A systematic source-to-sink matching approach to pair industrial CO2 sources with oil fields was successfully developed and generated sourcesink pairs. This approach measures the suitability and compatibility of CO2 sources in South Sumatra with available CO2 capture technologies and enables rapid screening and evaluation for very large numbers of reservoirs in South Sumatera basin. The GGS has the highest suitability as a CO2 source for an early CO2 EOR sequestration pilot scale with the ability to supply around 0.13 MtCO2 per year.

Figure 24 Source-sink matching for CO2-EOR sequestration pilot project in South Sumatera Basin (Usman et al., 2014)

36

After collecting some information as an approach such as journal articles, government official presentation materials, and report to identify the

Table 6 Pairing of Carbon Dioxide Sources and Candidate Oilfields for Carbon Dioxide Enhanced Oil Recovery in Indonesia CO2 availability (MMT/year)

Candidate oilfields for EOR

Oil originally in place (million barrels)*

Expected recovery with EOR (million barrels)*

2,200

550

Basin

Source of CO2

South Sumatra

Bangko Tengah Power Plant, Associated gas from Jabung Blocks (corridor wells), and Lematang Block (Singa and Harimau fields)

14

Ramba, Kenali Asam, Tempino, Raja, Niru, Abab, Limau Tengah, G. Kemala, Tanjung Tiga, Bajubang, Meruap, Kluang, Beringin

West Java

Muara Tawar Power Plant, Subang Gas Processing Plant

33

Jatibarang, X-Ray, Tambun, Cemara, Tugu Barat A

1,200

300

East Java

Gundih Natural Gas Processing Plant

0,2

Mudi, Sukowati, Kawengan, Nblobo

860

215

CO2 = Carbon diocide, EOR = enhanced oil recovery, MMT = million metric ton *The total amount of oil contained in the oild field before the start of production. *Assumed to be 25% of the oil in place based on a combined primary and secondary recovery rate of 35% and an ultimate recovery rate after EOR of 60% Source:Battelle analysis based on E. Putra 2016. Evaluation of CO2 - EOR injection and Its Potential Application to Indonesia. Houston. Enerproco. http://siephouston.org/wp-content/uploads/2017/06/CO2-EQR-SIEPH-Putra. pdf.

GGS in this paper, most likely it is the Merbau Gas Gathering Station. Same approach also applied to identify the oil field candidates for the project since the writers put codes upon it. The location of the oil fields can be seen in Figure 24. The result shown that pair of GGS and H3 oil field be selected for pilot purposes due to an inexpensive CO2 source and highest suitability for CO2 EOR sequestration. If the approach to identify GGS is correct, then the oil field is most likely Limau Niru field.

(ADB) report. Limau field is located in South Sumatera which operated by Pertamina EP. Limau field In the webinar held by LEMIGAS in June 30, 2021, Limau field may also absorb CO2 from other potential sources such as coal power plant, Dimethyl-Ether (DME) Plant, gas plant, and LPG plant as can be seen in Figure 25. The updated information regarding the potential CO2 sources for Limau field may reflecting the reservoir capacity.

Limau field is one potential candidate for CO2 enhanced oil recovery (EOR) based on Asian Development Bank

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

37

PLANNED CCS/CCUS PROJECTS IN INDONESIA

CO2 source projection for CCUS around Limau-Niru field CO2 source around Limau-Niru field

10000 9000

Total CO2 Source (ton/d)

8000 7000 6000 5000 4000 3000 2000 1000

2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 3 20 0 3 20 1 3 20 2 3 20 3 3 20 4 3 20 5 3 20 6 3 20 7 3 20 8 3 20 9 4 20 0 4 20 1 4 20 2 4 20 3 4 20 4 4 20 5 4 20 6 4 20 7 4 20 8 4 20 9 50

0 20

• Potential CO2 Source from DME Plant Which is schedule to be on-stream at Q3 2024

Years

Figure 25 CO2 sources around Limau-Niru field, (Pasarai, 2021)

II. 9. Natuna D-Alpha CCS Current Status: The block has been given to Pertamina but no significant progress has been made.

Total reserves including CO2: 222 TCF Natuna gas reserves: 46 TCF CO2 content: 71% Possible oil reserves: 41 MMSTB

Natuna D-Alpha area is located within the East Natuna PSC. In 2007 ExxonMobil returned the block to Indonesian government and in 2017 the full operatorship was given to Pertamina. Natuna gas field is one of the world’s largest natural gas accumulations with an estimated 222 TCF gas in-place (71% CO2). The reservoir is a porous carbonate

38

buildup within the Miocene Terumbu Formation covering approximately 310 km2 with a maximum column height of 1638 metres. East Natuna Basin record a complex geologic history that includes rifting and sea floor spreading focused to the north in the South China Sea, as well as convergence and subduction along the northwest coast of Borneo (Hamilton, 1979). During the streching the Borneo continental ,argin considerable subsidence, produced a broad complex of structural blocks and carbonate buildups during the middle Miocene. Carbonate growth in conjunction with a phase rapid subsidence due to loading of an orogenic front in northwestern Borneo. The stratigraphy data of East Natuna contain: The reservoir of East Natuna that formed by the Limestone of Terumbu Formation; Gabus and Arang,

the mature source facies which contain fluvial and coastal pain deposit; Top seal and upper lateral seal for the upper Terumbu is provided by the Muda formation. The most promising are the Terumbu Formation, the porous carbonate for almost 1600 meters thickness. Lithofacies within the Natuna field are characterized by distinct depositional textures and diagenetic features. They are defined by theis most abundant skeletal gtains and their texture or mud content, following the classification of Dunham (1962). In decreasing order of reservoir quality the five main lithofacies are (1) Coral-

Red Algal Boundstone, (2) CoralRed Algal Grainstone, (3) Red-Algal Echinoderm Packstones, (4) Red-Algal Benthic Foraminifera Packstones, (5) Plantonic Foram Wackestone or Mudstone (Dunn, P.A, et al.,1996). Terumbu Formation are good quality reservoir because it has a pore system comprising the combination of intergranular, intragranular, and vuggy pore with the porosity 14,5 % and permebility 1,6 mD. Based on stratigraphics of the basin and properties of rock types between the comparation of Midale Beds and Terumbu Formation, the reservoir in Terumbu Formation has the prospectivity for CCS. This includes on the geological properties such as, lithology type, porosity, permebility, depositional environment, and diagenetic type. It has the potential of the type of reservoir, depth of reservoir, porosity, permebility, and type of seal that developed very well.

Figure 26 East Natuna PSC

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

39

III

POTENTIAL LOCATIONS FOR CCS/ CCUS PROJECTS IN INDONESIA At this moment, we see that the potential locations for CCS/CCUS in Indonesia will be very much determined by geological-storage rather than capture. The reasons were mainly because of the very low probability of CO2 utilization in Indonesia and small numbers of areas that can fit for CO2 storage. For example, in the East Java-West Java border, there have been many geological activities have been conducted since 1910, generating decent subsurface data that can be

useful for storage study. Compared to area such as southern Java where there has been practically no significant subsurface data that has be produced. III.1. Fields Candidates for CO2 Injection In 2019, SKK Migas successfully identified 75 fields for CO2 injection. The field locations can be seen in Figure 27 and Table 7.

CO2 Injection Field Candidates

Figure 27 CO2 Field Injection Candidates (SKK Migas, 2019)

40

Most of the CO2 field candidates are oil field located across Indonesia which mostly operated by Pertamina group. In this case Pertamina EP is the subsidiary Pertamina which hold most of the oil field candidates. Some of them are relinquished fields which contract has been expired and/or did not receive extension from the Indonesian government. Pertamina receives more priority to operate relinquished oil and gas fields. Even though Pertamina is not obligated to take all of the relinquished fields. For instance, Rokan PSC that previously belongs to Chevron Pacific Indonesia, now operated by Pertamina Hulu Energi Rokan CPP. The scheme of relinquished fields is stipulated in MEMR No. 3 the year of 2019. The bidding for relinquished oil and gas fields is open for any investor. Table 7 List of CO2 Field Injection Candidates No

Field

PSC Operator

Location

No

Field

PSC Operator

Location

23

Udang

Pertamina EP

24

Air Serdang

Pertamina EP

Natuna South Sumatera

Riau

25

Gemah

Riau

26

Bajubang

Petrochina International Jabung Ltd. Pertamina EP

27

Tempino

Pertamina EP

28

Kenali Asam

Pertamina EP

Jambi

29

North Pulai

Pertamina EP

30

Meruap

Pertamina EP

31

Jirak

Pertamina EP

32

Talang Jimar Pertamina EP

Riau South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera

10

Aman

11

Bekasap S

12

Minas

13

Zamrud

Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Pertamina Hulu Energi Rokan CPP Bumi Siak Pusako

14

Beruk

Bumi Siak Pusako

Riau

15

Benua

Bumi Siak Pusako

Riau

16

Pusaka

Bumi Siak Pusako

Riau

17

Butun

Riau

18

Kurau

19

Rantau

Bumi Siak Pusako EMP Malacca Strait S.A. Pertamina EP

20

Sago

21

KRA

22

KF

1

Bangko

2

Bekasap

3

Petani

4

Pematang

5

Sintong

6

Libo. S.E.

7

Seruni

8

Benar

9

Menggala North

Pertamina EP Star Energy Kakap Ltd. Star Energy Kakap Ltd.

Riau Riau

Riau Riau Riau Riau Riau

33 Riau 34 Riau 35 Riau Riau

36 37

Benakat Pertamina EP Barat Benakat Pertamina EP Timur Tanjung Tiga Pertamina EP Barat Pertamina EP (ex Dewa Stanvac) Abab

38

Raja

39

Beringin D

Riau

40

Tanjung Miring Timur

Natuna

41

Abab

Natuna

42

Limau P

Riau Aceh

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

Pertamina EP

Jambi Jambi Jambi

Pertamina Hulu Energi Raja Tempirai (raja/ South pendopo) Sumatera Radja -> Pertamina EP South Pertamina EP Sumatera South Pertamina EP Sumatera South Pertamina EP Sumatera South Pertamina EP Sumatera

41

POTENTIAL LOCATIONS FOR CCS/CCUS PROJECTS IN INDONESIA

No

Field

PSC Operator

43

Limau Q51

Pertamina EP

44

Limau Barat

Pertamina EP

45 46 47 48

49

Limau Tengah LimauBelimbing Niru Gunung Kemala Barat Gunung Kemala Tengah

Pertamina EP Pertamina EP Pertamina EP

Location South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera

Pertamina EP

South Sumatera

Pertamina EP

South Sumatera

50

Musi

Pertamina EP

51

Bentayan

Pertamina EP

52

Ramba

Pertamina EP

53

Mangunjaya

Conocophillips

54

Kluang

Conocophillips

55

Sopa

Pertamina EP

56

Tempino

Pertamina EP

57

Rama

PHE OSES

58

Krisna

PHE OSES

59

Zelda

PHE OSES

South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera South Sumatera Jambi South Sumatera South Sumatera South Sumatera

No

Field

PSC Operator

Location South Sumatera South Sumatera West Java

60

Farida

PHE OSES

61

Sundari

PHE OSES

62

MQ

PHE ONWJ

63

X-Ray

Pertamina EP

West Java

64

Tambun

Pertamina EP

West Java

65

Cemara

Pertamina EP

West Java

66

Jatibarang

Pertamina EP

West Java

67

Tugu Barat A Pertamina EP

West Java

68

Sukowati

East Java

69

Mudi

70

Kawengan

71

Nglobo

72

Poleng

Pertamina EP Pertamina Hulu Energi Tuban East Java Pertamina EP Pertamina EP Cepu ADK PHE WMO

73

Semberah

Pertamina EP

74

Handil

75

Bekapai

Pertamina Hulu Mahakam Pertamina Hulu Mahakam

East Java East Java East Java East Java East Kalimantan East Kalimantan East Kalimantan

According to Sugihardjo et al., 2017, there are also several gas fields that potentially to become CO2 storage located in South Sumatera and West Java as can be seen in Figure 28.

Figure 28 Gas Field Locations in West Java and South Sumatera for CO2 Storage (Sugihardjo, Sismantono, Lubad, Hedriana, & Sugiyanto, 2017)

42

III.2 Provinces with biggest potentials for CCS/CCUS Based on SKK Migas data above and data cross matching with power plants, we estimate there will be 6 provinces that can be targeted for CCS/CCUS. These 6 provinces we predict has the largest probabilities where CCS/CCUS projects can be built taking into account the potentials in storage and presence of power plants. 1. West Java West Java and Jakarta provinces is the largest province in Indonesia in terms of economic size and energy consumption per capita including Jakarta. There are two large oil-gas concessions located in West Java namely Offshore North West Java and Jawa Bagian Barat, which are all owned by Pertamina. Current operations of these two blocks are mainly located offshore of Java Sea and inland exploitation activities are mostly utilizing remaining old wells. Subsurface data of West Java continent are sufficient enough having these areas has been exploited for more than 20 years. The electricity sector in West Java is mainly from by coal and natural gas power plants. As of July 2021, there are 7 existing coal power stations with total capacity of 2610 MW and 23 gas-fueled power plants that will be operational by the end of 2021 with capacity of 4553 MW.

Legend: Blue dots = Oil/Gas Well Electricity icon = Coal Power Plant / Gas Fueled Power Plant

Existing power plants and to be operational in 2021/22 Capacity

Capacity to be operational in 2021/22

Total capacity

Number of coal fired power plants*

2610 MW

-

2610 MW

Number of gas

2393 MW

2160 MW

4553 MW

fueled power plants* * including PLN & IPP

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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POTENTIAL LOCATIONS FOR CCS/CCUS PROJECTS IN INDONESIA

2. Central Java Central Java oil and gas activities are located mainly in the Rembang and Blora Municipalities, in the border with East Java province. Two blocks namely Cepu block and East Java Area 3 are laid on Central Java and East Java provinces. These two block

currently are the largest oil producer concessions in Indonesia. Activities of oil-gas have been mainly carried out in these areas since Dutch colonials era hence we believe there are sufficient basic subsurface data that can be explored.

Legend: Blue dots = Oil/Gas Well Electricity icon = Coal Power Plant / Gas Fueled Power Plant

Existing power plants and to be operational in 2021/22 Capacity

Capacity to be operational in 2021/22

Total capacity

Coal fired power plants*

5208 MW

3900 MW

9108 MW

Gas fueled power plants*

810 MW

779 MW

1589 MW

* including PLN & IPP

44

Power plants in this province are relying on coal and natural gas, where coal being dominant energy source. We estimate there will be more than 10 GW of power supply by the end of 2022 in Central Java coming from coal and natural gas power plants. The relatively near and adjacent location of these power plants and existing oil-gas reservoir could be an advantage points for CCUS/CCS.

3. East Java Almost similar to Central Java province, East Java province also possess huge potentials for CCS-CCUS because of abundance oil and gas exploration and exploitation activities. We calculated there are five large concessions that are laid in East java province including those that are located cross-boundaries with Central Legend: Blue dots = Oil/Gas Well java including Cepu Block and Electricity icon = Coal Power Plant / Gas Fueled Power Plant East Java Area 3 blocks. There are lots of oil-gas activities offshore as well as Existing power plants and to be operational in 2021/22 inland in the East Java. For the power sector, Central Java has more dependence on natural gas compared to other provinces because of availability of gas in the province. From total 9,6 GW installed capacity, 29% are supplied from natural-gas fueled power plants. 4. South Sumatera South Sumatera province is the largest coal-reserves province in Indonesia. The province is also abundant with natural gas and oil. There are more than 15 active blocks in the province and all of them are operating onshore. There also hundreds of new wells being drilled every year by contractors making this province have sufficient subsurface data.

Capacity

Capacity to be operational in 2021/22

Total capacity

Coal fired power plants*

6745 MW

-

6745 MW

Gas fueled power plants*

2862 MW

-

2862 MW

* including PLN & IPP

Pangkal Pinang

Palembang

SOUTH SUMATERA Lubuklinggau Perabumulih

Curup

Bengkulu

Lahat

Legend: Blue dots = Oil/Gas Well Electricity icon = Coal Power Plant / Gas Fueled Power Plant

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

45

POTENTIAL LOCATIONS FOR CCS/CCUS PROJECTS IN INDONESIA

Notable concessions in this province are Corridor Block, Suban block, Sumbagsel Area 2 block, Lematang block, South Sumatera block and Ogan Komering. Notable shareholders in these concessions are Pertamina, ConocoPhillips, Medco and Repsol.

Existing power plants and to be operational in 2021/22 Capacity

Capacity to be operational in 2021/22

Total capacity

Coal fired power plants*

1208 MW

-

1208 MW

Gas fueled power plants*

582 MW

-

582 MW

* including PLN & IPP

Power supply in South Sumatera area largely supported by coal where as of 2020 there are 1,2 GW total combined power plants. Gas-fueled power plants contributes 582 MW or around 32 percent from total 1790 MW.

5. Aceh Aceh Province was once the pioneer of LNG production in the world in 1970 with the presence NSO Block and B Block that were managed by ExxonMobil. Currently these two blocks are owned by Pertamina and no longer sold as LNG but sent by pipe. Despite so, Aceh remain an

Banda Aceh Kota Sigli Ganda Pura

ACEH

Legend: Blue dots = Oil/Gas Well Electricity icon = Coal Power Plant / Gas Fueled Power Plant

46

important oil-gas province in Indonesia with reserves that currently being developed by mainly Pertamina and Medco. Onshore subsurface data has been gathered for decades and should be useful for early study for CCSCCUS. There is also Andaman block that holds more than 6 TCF of gas and 200 million barrels condensate, that is now being developed by Mubadala, Premier Oil and BP. Subsurface data that has been explored in Aceh were mainly located nearby the city of Lhokseumawe. Oil-gas activities in Aceh were mainly conducted in the northern part of the province.

Birem Bayeun

For power sector, Aceh relies on coal, natural gas and diesel gensets. Significant large

coal-fired power plants in Aceh are located in the southern shorelines of Aceh while gasfired are located in northern lines. In our view, Aceh has potentials in CCUS/CCS but not as in capture the CO2 from emitting power plants but rather focus on EOR/EGR. 6. Riau Oil-gas activities in Riau were mainly conducted inland and nearby the Province’s capital of Pekanbaru. There are numerous fields with reservoir that shows promising indications for CO2 geological storage. Currently the most significant stakeholder in Riau oil-gas is Pertamina, especially after Rokan Block was expired and handed over from Chevron. Riau currently has no new significant findings in the past 10 years hence making it only exploits existing reservoirs. Riau is one of the few provinces in Indonesia that rely more on natural gas than coal. There is 505 MW net power supply that coming from gas-fueled power plants while only 184 MW from coal. The upcoming power supply in Riau system will also use natural gas.

Existing power plants and to be operational in 2021/22 Capacity

Capacity to be operational in 2021/22

Total capacity

Coal fired power plants*

180 MW

-

180 MW

Gas fueled power plants*

203 MW

-

203 MW

* including PLN & IPP

Tanjung Balai-Meral

Batam

RIAU

Tanjung Pinang

Pekanbaru

Payakumbuh Pariaman Selatan Padang

WEST SUMATERA

Mendahara

Legend: Blue dots = Oil/Gas Well Electricity icon = Coal Power Plant / Gas Fueled Power Plant

Existing power plants and to be operational in 2021/22 Capacity

Capacity to be operational in 2021/22

Total capacity

Coal fired power plants*

184 MW

-

184 MW

Gas fueled power plants*

505 MW

275 MW

785 MW

* including PLN & IPP

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

47

IV

BUSINESS MODELS OF CCS/ CCUS PROJECTS IN INDONESIA This section will explore possible business models for CCS/CCUS activities in Indonesia. We identify four potential business models for CCS/CCUS that could be implemented. They are described below. 1. CCUS Enhanced Oil Recovery (EOR)/ Enhanced Gas Recovery (EGR)

Pros-Cons (+) This model is easily accepted economically due to its direct impact in increasing oil or gas output

The CCUS EOR/EGR model is the simplest model where it only involves oil-gas block shareholders. The carbon captured will be used to boost oil/gas production in the fields that are already mature and experiencing decreasing production pattern. Chart below explains the flow process for carbon, money, and output.

(+) Does not necessarily need transportation cost (-) Seen as partial environment solution, since oil and gas will at the end combusted and produce CO2

CCUS EOR/EGR

48

2. CCUS non-EOR/EGR

to produce economically valuable products or services.

The CCUS EOR/EGR model is the The CCUS non EOR/EGR model is almost similar with previous model but differs on the purpose of carbon injection. In the previous model, carbon captured is set to slow down the decrease of output in the field that is already mature, but in this model carbon captured is used for other objectives such as petrochemical or “recycled”

Pros-Cons (+) Seen as complete environment solution. (-) Long term input assurance for CO2 processor (-) The derived-products normally will be expensive (-) Hard to compete when oil-gas in downturn price

CCUS non EOR/EGR

3. CCUS Coal Power Plant The CCUS coal power plant model is almost similar with model number two but differs on the source of CO2. In the previous model, carbon is obtained from an oil/gas field while here the CO2 coming from coal power plants. The CO2 is then processed by third party used for other objectives such as petrochemical or “recycled” to produce economically valuable products or services. Pros-Cons (+) Seen as complete environment solution. (+) Strong CO2 supply for coal-relying country (+) Multiple sources – lots of coal power plants

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

49

BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

(+) Green electricity (-) More expensive electricity price (-) The derived-products of CO2 normally will relatively more expensive (-) Reduced electricity output from the plant CCUS Coal Power Plant

4. CCS Oil-Gas The CCS Oil & Gas model is almost similar with model number one but the CO2 captured will not be utilized as in the frame of boosting production because the oil/gas field is not mature yet hence does not need boost. The CO2 will not also goes to processing party because of small CO2 amount possessed and long distance for transportation to reach customers.

Pros-Cons (+) Oil/Gas produced will be labeled a greener product compared to those who does not capture the CO2 (-) More investment made by shareholder for injecting facility (-) Longer payback period (-) Fragile to downturn of oil-gas price (-) Heavy competition with cheaper gas/oil

CCS Oil & Gas

50

The business model elements in CCUS/CCS can be divided into four big aspects, they are revenue models, funding source, capital & ownership, and risk management.

Business model elements

Revenue models • • • • • • • •

CfD on CO2 price Tradeable CSS certiĆcates Tradeable tax credits EPS + tradeable CO2 credits Regulated Asset Base Cost plus open book Product CO2 taxes Low carbon market creation

Funding source • • • • •

Emmiters Fossil fuel suppliers Energy consumers Exchequer Purchasers of low-carbon products • CO2 sales for utilization (e.g. EOR)

Risk management

Capital & Ownership

• Loan Guarantees • Stable long-term Policy/contracts • Revenue guarantees • Public underwriting of risk • Insurer/buyer of last resort • Price ćoor & ceilings • T&S fee regulation

Capital • Public grants/loans • Emitter equity • Debt Ownership • Private • PPP • Public (unlikely)

Figure 29 CCS Business Model Elements (Muslemani, Xi, Ascui, & Kaesehage, 2019)

The enabling factors of CCS projects are policies and government support; synergies with the oil industry; and infrastructure. While risk and uncertainties factors are cost, access to funding, permitting, and public acceptance.

Table 8 Examples of Various Hub and Cluster models of CCUS No.

1

Type

Neighbouring emitters share transport/storage facility

Emission/Recovery (E/R)

Utilisation/Storage (U/S)

Transport

Separate

E/R

Transport and U/S E/R

[Comment] A typical hub and cluster model. Reduces risk/cost by separating E/R and U/S 2

Variation of type 1 that includes distant emitter

e.g. industrial hub near Edmonton Separate

E/R

Transport and U/S E/R e.g. oil reĆnery in Fort Mc Murray E/R [Example] Heartland Area Redwater Storage PJ (Canada) [Comment] Sharing of storage facility, high trasnport cost.

3

Different ownership for transport and storage

E/R

Separate

Separate Transport

U/S

E/R

[Example] Peterhead PJ (United Kingdom) [Comment] Improved ćexibillity of transport and storage

4

Multiple storage site

E/R

Separate

Separate

Storage

Transport E/R

Storage

[Example] Teesside Low Carbon PJ (United Kingdom) [Comment] Improved ćexibility of transport and storage facilities.

(Kimura, Shinchi, Shinchi, & Coulmas, 2021)

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

Possibility of improved proĆtability when tax rates differ based on storage type (enhanced oil recovery, storage).

51

BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

IV. 1. CCS/CCUS Projects Financiers Global markets and the broad financial sector have a powerful role to play in driving the transition to a net-zero economy and supporting clean growth opportunities. With the development of new sustainable investment products, as well as provision of traditional project finance, the sector can provide the key to unlocking the capital flows needed to support the scaling up of CCS. As the spirit environment and green economy has also been forced to European and US financiers that operates in Asia, there has been numerous interests to finance carbon capture project, either the standalone carbon capture project or as in full chain of CCUS. The cost of deploying CCS in Indonesia varies from the very low early opportunity projects in natural gas extraction and processing, up to more expensive projects in power and industry. There are numerous natural gas operations with high CO2 content and which are similar to Sleipner in the North Sea with CO2 avoided costs in the region of $15-20 per tonne. There is some potential for CCS to be funded through other methods such as through the clean development mechanism (CDM), EOR, and other options. Funds transfer into developing

52

countries and mechanisms like the CDM, in conjunction with binding targets in developed countries, may be considered as the primary means to see CCS deployment and effective climate change strategies in Indonesia. Cost recovery may also be considered as an option for demonstration with an expectation from industry that funds used for these early demonstration projects may be reimbursed. If cost recovery was not possible, the Indonesian Climate Change Trust Fund may be considered an alternative funding option if it is able to be used for CCS and EOR. Innovative funding models may be an option, such as used in the CO2CRC Otway project which was collaboratively funded by governments and industries including oil, gas and coal. This means that all the financial members share in the results and knowledge generated by the project but they also share in the financial risk. This could be a model that Indonesia may consider engaging international companies in Indonesia to contribute and collaborate in a pilot project. Placing a levy on fossil fuel production on oil companies operating in Indonesia has been practiced in Australia as well and also provides some indication of related policies that may be implemented in Indonesia

IV. 2. Green LNG/Gas CO2 management in future LNG plant is beneficial for the sustainability of the LNG business since LNG production and transportation leaves high amount of carbon footprints. LNG is associated with upstream production, liquefaction, and transportation which each of the value chain is emitting CO2. According to WoodMackenzie, an average cargo life cycle will emit approximately 270,000 tonnes of CO2 equivalent. This amount of CO2 requires about 240,000 trees to offset the emissions. The CO2 emission from various LNG projects can be seen in Figure 30. It is still achievable for a small number of cargoes and the cost of these offsetting projects is relatively cheap. This sort of carbon emission offset for LNG production and distribution lately known as carbon neutral LNG.

In June 18, 2019, GS Energy and Tokyo Gas have signed an agreement with Shell Eastern Trading (Pte) Limited for delivery of one cargo each of carbon neutral liquefied natural gas (LNG). Nature based carbon credits will be used to compensate the full carbon dioxide (CO2) emissions generated – from exploring for and producing the natural gas, to use by the final consumer. The cargoes which will be delivered by July 2019, will provide enough carbon neutral energy to power nearly 300,000 homes for a full year. The list of other carbon neutral LNG deal can be seen in Table 9. In Indonesia, there are 3 LNG/gas production plans that aimed to be labeled as Green, they are, Repsol Sakakemang, bp Tangguh Train 3 LNG and Abadi LNG by Inpex.

Emission vary considerably across LNG Projects

Figure 30 Emissions across various LNG Projects

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

Table 9 Carbon-Neutral LNG Deal List Seller

Buyer

Tanker

Destination

Source of Certificates

Shell

Tokyo Gas

LNG

Japan

From Shell project portfolio June 18, 2019

Date

Shell

GS Energy

LNG

South Korea

From Shell project portfolio June 18, 2019

JERA

n/a

LNG

India

CER

Shell

CPC

LNG

Taiwan

From Shell project portfolio March 4, 2020

Total

CNOOC

LNG

China

VCS units

Mitsui

Hokkaido Gas

LNG

Japan

From Mitsui portofolio

February 26, 2021

Gazprom

Shell

LNG

U.K.

VCS

March 8, 2021 January 21, 2021

June 27, 2019 September 29, 2020

Occidental

Reliance

Crude Oil

India

VCU through CBL platform

Woodside

Trafigura

Condensate

n/a

Gold Standard, VCS

March 15, 2021

Oman LNG

Shell

LNG

U.K.

n/a

June 21, 2021

IV.3 Commercial CCS Facilities Global CCS Institute identified 55 of operational CCS facilities around the globe. The list can be seen in Table 10. Based on the list, there are three CCS facilities commenced in 2020 such as Alberta Carbon Trunk Line (ACTL) with North West Redwater Partnership’s Sturgeon Refinery CO2 Stream in Canada; Alberta Carbon Trunk Line (ACTL) with Nutrien CO2 Stream in Canada; and Mikawa Post Combustion Capture Demonstration Plant in Japan. The CCS facility is applied to various industries.

The data shown that CCS mostly being used in oil and gas industries. But some of CCS projects are developed in hydrogen industry which projected as a future clean fuel. The projects are Tomakomai CCS Demonstration Project in Japan; Quest in Canada; and Air Products Steam Methane Reformer in United States. These projects indicated that CCS facility could be developed as a part of climate mitigation by capturing CO2 emission as well as supporting clean fuel production.

Table 10 Operational CCS Facilities Around the Globe, (Global CCS Institute) No

1

2

54

Facility Name Alberta Carbon Trunk Line (ACTL) with North West Redwater Partnership's Sturgeon Refinery CO2 Stream Alberta Carbon Trunk Line (ACTL) with Nutrien CO2 Stream

Category

Status

Country

Operational Year

Industry

EPCI

Commercial CCS Facility

Operational Canada

2020

Oil Refining

SAW Engineering

Commercial CCS Facility

Operational Canada

2020

Fertilizer Production

SAW Engineering

No

Facility Name

Category

Status

Country

3

Mikawa Post Pilot and Combustion Capture Demonstration Demonstration Plant CCS Facility

Operational Japan

4

Drax bioenergy carbon capture pilot plant

Pilot and Demonstration CCS Facility

Operational

5

Gorgon Carbon Dioxide Injection

6

Qatar LNG CCS

7

CMC Research Institutes (CMCRI)

8 9

10

11

12

13

14

15

16

17

18

19

20

CNPC Jilin Oil Field CO2 EOR Geothermal Plant with CO2 Reinjection Haifeng Carbon Capture Test Platform NET Power Clean Energy Large-scale Pilot Plant Wyoming Integrated Test Center (ITC) Illinois Industrial Carbon Capture and Storage PetroChina Changqing Oil Field EOR CCUS STEPWISE Pilot of SEWGS Technology at Swerea/Mefos Abu Dhabi CCS (Phase 1 being Emirates Steel Industries) Fuel Cell Carbon Capture Pilot Plant

Operational Year

Industry

2020

Power Generation

United Kingdom

2019

Power Generation

Commercial CCS Facility

Operational Australia

2019

Natural Gas Processing

Commercial CCS Facility

Operational Qatar

2019

Natural Gas Processing

Operational Canada

2018

n/a

Operational China

2018

Natural Gas Processing

Operational Croatia

2018

Power Generation

Operational China

2018

Power Generation

Pilot and Demonstration CCS Facility Commercial CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility Commercial CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility Commercial CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility Pilot and Demonstration CCS Facility

Tomakomai CCS Demonstration Project CIUDEN: CO2 Storage Technology Development Plant Karamay Dunhua Oil Commercial CCS Technology CCUS Facility EOR Project

Operational

United States

2018

Power Generation

Operational

United States

2018

Power Generation

Operational

United States

2017

Ethanol Production

Operational China

2017

Coal-toliquids (CTL)

Operational Sweden

2017

Iron and Steel Production

United Operational Arab Emirates

2016

Iron and Steel Production

United States

2016

Power Generation

Operational Japan

2016

Hydrogen Production

Operational Spain

2015

n/a

Operational China

2015

Methanol Production

Operational

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

EPCI Toshiba Energy Systems & Solutions Corporation Mitsubishi Heavy Industries Engineering, Ltd Kellogg Joint Venture Group (KJVG) Chiyoda Corporation and Technip Energies

Abu Dhabi CCS

JGC

55

BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

No 21 22 23 24 25 26 27

28

29 30 31 32

33

34

35

36

37

38

39

40

56

Facility Name Quest Shand Carbon Capture Test Facility (CCTF) Uthmaniyah CO2EOR Demonstration Boundary Dam 3 Carbon Capture and Storage Facility Air Products Steam Methane Reformer Coffeyville Gasification Plant Farnsworth Unit EOR Field Project Development Phase

Category Commercial CCS Facility Pilot and Demonstration CCS Facility Commercial CCS Facility Commercial CCS Facility

Commercial CCS Facility Commercial CCS Facility Pilot and Demonstration CCS Facility Pilot and ITRI Calcium Demonstration Looping Pilot CCS Facility Michigan Basin Pilot and Large Scale Injection Demonstration Test CCS Facility Commercial CCS PCS Nitrogen Facility Bonanza BioEnergy Commercial CCS Facility CCUS EOR Pilot and CarbFix Project Demonstration CCS Facility Husky Energy Lashburn and Pilot and Tangleflags CO2 Demonstration Injection in Heavy Oil CCS Facility Reservoirs Project Pilot and Technology Centre Demonstration Mongstad (TCM) CCS Facility Pilot and National Carbon Capture Center Demonstration (NCCC) CCS Facility Petrobras Santos Commercial CCS Basin Pre-Salt Oil Facility Field CCS Bell Creek Incidental CO2 Pilot and Storage Associated Demonstration with a Commercial CCS Facility EOR Project Commercial CCS Century Plant Facility Sinopec Shengli Oilfield Carbon Pilot and Capture Utilization Demonstration and Storage Pilot CCS Facility Project Arkalon CO2 Commercial CCS Compression Facility Facility

Status

Country

Operational Year

Industry

Operational Canada

2015

Hydrogen Production

Operational Canada

2015

n/a

2015

Natural Gas Processing

2014

Power Generation

Operational

Saudi Arabia

Operational Canada United States United Operational States

Operational

Operational

United States

Operational China

Operational

United States

United States United Operational States Operational

2013 2013 2013

Cement Production

2013

Natural Gas Processing

2012

Fertilizer Production Ethanol Production

Operational Iceland

2012

Power Generation

Operational Canada

2012

Ethanol Production

Operational Norway

2012

Oil Refining

2011

Various

2011

Natural Gas Processing

Operational

United States

Operational Brazil

Operational

United States

2010

Natural Gas Processing

Operational

United States

2010

Natural Gas Processing

2010

Power Generation

2009

Ethanol Production

Operational China

Operational

United States

Fluor

SNC-Lavalin

Hydrogen Air Products Production Fertilizer Aemetis Production Ethanol Production and Fertilizer

2013

2013

EPCI

No 41

42 43

44

45 46 47

48 49 50 51

52

53

54

55

Facility Name

Category

Pilot and Demonstration CCS Facility Pilot and CO2CRC Otway Demonstration CCS Facility Commercial CCS Snøhvit CO2 Storage Facility Sinopec Zhongyuan Carbon Capture Commercial CCS Utilization and Facility Storage Post-Combustion Pilot and Capture (PCC)@ Demonstration CSIRO CCS Facility Core Energy CO2Commercial CCS EOR Facility Daqing Oil Field Pilot and EOR Demonstration Demonstration Project CCS Facility Great Plains Commercial CCS Synfuels Plant and Facility Weyburn-Midale Sleipner CO2 Commercial CCS Storage Facility Shute Creek Gas Commercial CCS Processing Plant Facility Commercial CCS Enid Fertilizer Facility Terrell Natural Gas Commercial CCS Processing Plant (formerly Val Verde Facility Natural Gas Plants) COURSE 50 CO2 Ultimate Reduction in Pilot and Steelmaking Process Demonstration by Innovative CCS Facility Technology for Cool Earth 50 National Pilot and Geosequestration Demonstration Laboratory (NGL) CCS Facility Australia UKCCSRC PilotPilot and scale Advanced Demonstration Capture Technology CCS Facility (PACT) Cranfield Project

Status

Country United States

Operational

Operational Year

Industry

2009

n/a

Operational Australia

2008

Natural Gas Processing

Operational Norway

2008

Natural Gas Processing

Operational China

2006

Chemical Production

Operational Australia

2005

Power Generation

2003

Natural Gas Processing

2003

Industrial Applications

2000

Synthetic Natural Gas

United States

Operational

Operational China United States

Operational

Operational Norway United States United Operational States

Operational

United States

1996 1986 1982

Natural Gas Processing Natural Gas Processing Fertilizer Production

1972

Natural Gas Processing

Operational Japan

n/a

Iron and Steel Production

Operational Australia

n/a

n/a

United Kingdom

n/a

Power Generation

Operational

Operational

As shown in the table, big CCS facility mostly developed in natural gas processing industry prior to 2020. Because of Enhanced Oil / Gas Recovery method, which similar to CCS, is implemented to increase the

EPCI

GE Oil & Gas

Aker Carbon Capture UOP*

production of numerous fields. Refers to the chart, there is a switch of CCS utilization post 2020. The CCS will implemented mostly in coal power generation. It seems as an action of climate mitigation since the coal power

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

57

BUSINESS MODELS OF CCS/CCUS PROJECTS IN INDONESIA

plant emits a massive amount of CO2 to the atmosphere. A standalone CCS facility for industry may very costly. Not all industry that emits CO2 is able to provide capital investment for CCS projects. The amount of CO2 emitted by the INTEGRATED MIDCONTINENT STACKED CARBON STORAGE HUB

4

1.9 - 19.4 Mtpa

1

5

ACTL

2 - 15 Mtpa

WABASH CARBONSAFE

8 NORTHERN LIGHTS

1.5 - 18 Mtpa

1.7 - 14.6 Mtpa

CARBONSAFE 3 ILLINOIS MACON COUNTY

0.8 - 5 Mtpa

8 9 1 2 4

3 6

14

11 12

5

10 13

7

NORTH DAKOTA 2 CARBONSAFE 3 - 17 Mtpa

7 PETROBRAS SANTOS BASIN CCS CLUSTER 9 FPSOs - 3 Mtpa

6 GULF OF MEXICO CCUS HUB 6.6 - 35 Mtpa

NATURAL GAS POWER NATURAL GAS PROCESSING FERTILISER PRODUCTION HYDROGEN PRODUCTION IRON AND STEEL PRODUCTION

12 ATHOS

ZERO CARBON 10 HUMBER

1 - 6 Mtpa

Up to 18.3 Mtpa

INDUSTRY SECTOR COAL FIRED POWER

11 PORTHOS 2 - 5 Mtpa

STORAGE TYPE CHEMICAL & PETROCHEMICAL PRODUCTION CEMENT PRODUCTION WASTE INCINERATION ETHANOL PRODUCTION BIOMASS POWER

industry is also varied subject to the plant capacity. Since one key consideration of CCS project is the CO2 concentration, CCS clustering could be a solution. A CCS cluster will combine several industrial facilities in a single CCS infrastructure which 9 NET ZERO TEESSIDE includes capture, 0.8 - 6 Mtpa compression, transport and permanent storage XINJIANG JUNGGAR 14 BASIN CCS HUB of CO2. This method 0.2 - 3 Mtpa will improve the project economic viability as the cost is shared among the industry players. Clustering will create a network of smaller emitters, and centralize the parts of the CCS 15 infrastructure that are shared by all of the 13 ABU DHABI CLUSTER industry players. The 2.7 - 5 Mtpa existing industrial CCS hubs location, capacity, and 15 CARBONNET industry player can 2 - 5 Mtpa be seen in Figure 31. DELIVERY

DEEP SALINE FORMATIONS

PIPELINE

ENHANCED OIL RECOVERY

SHIP

DEPLETED OIL AND GAS RESERVOIRS VARIOUS OPTIONS CONSIDERED

ROAD DIRECT INJECTION

Figure 31 Industrial CCS Hubs, (Zapantis, 2021)

58

V

KEY DRIVERS OF CCUS PROJECT IN INDONESIA

This section will elaborate what drivers that could push CCS-CCUS in Indonesia. As a developing economy, Indonesia’s main consideration will be largely on economic side rather than environment. However, we see also other aspects and factors that could significantly affect the advancement of CCS-CCUS. Refers to (Zapantis, 2021) from Global CCS Institute, there are several drivers of CCS deployment:

regulation of CO2 storage, support for storage resource appraisal appropriate management of longterm liability for geological stored CO2 3. Lower cost CO2 geological storage Existing data from hydrocarbon exploration / production 4. Opportunities for CCS hubs to deliver economies of scale and mitigate risk CO2 sources located proximate to each other and geological storage resources

1. Lower cost capture applications first (higher CO2 partial pressure) Natural gas processing/oil refining – chemical production including H2 – biofuel – steel making – coal power

5. Net zero commitments – avoidance of stranded assets

2. Policies that mitigate market failures and create a business case for investment Values on CO2 clear

(Amijaya, 2011) Hichon et al (1999) explains that aquifers suitable for injection of carbon dioxide must

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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KEY DRIVERS OF CCUS PROJECT IN INDONESIA

satisfy these following conditions: (1) from the physical and geochemical points of view, the top aquifer must be (usually) more than 800 m deep (at this depth, the carbon dioxide will be in a supercritical state); (2) the aquifer should be capped by a regional aquitard (sealing unit); (3) the aquifer should have enough porosity and adequate permeability. The nearwell permeability should be high to allow good injectivity, but the regional permeability should be so low so that the residence time of the carbon dioxide is high; (4) the injection should be close to the carbon dioxide emitting source.

Topographic

Compaction North Sumatra Sibolga, Bengkulu Central Sumatra Ombilin South Sumatera Bogor Asem-Asem Kendeng Through Melawi-Ketungau Bone, Flores Lombok Merauke-Waropen Salawati, Bintuni North West Java North East Java Sunda-Asri, North & South Makassar East Natuna

High

Risk of leakage

Mixed

Divergent basins are the most suitable for CO2 storage as a result of their stability, reduced tectonic activity and favorable structure. Foreland basins are also favorable for CO2 storage. Convergent basins are located in tectonically active areas and usually subject to volcanism, earthquakes and active faulting. This makes them generally unsuitable for CO2 storage unless great precaution is taken. Convergent intramontane basins are largely unsuited to CO2 storage. Cratonic platforms lack the porosity and permeability required for CO2 storage. Orogenic belts lack continuous seals. Both are unsuited for CO2 storage.

Kutai, Barito, Tarakan Sulawesi Sea Akuimegah West Natuna, Arafura

Intermediate

Low

High

Intermediate

Low

Figure 32 Diagram showing risk of leakage of Indonesian sedimentary basins (Amijaya, 2011)

60

Looking at the condition of Indonesia sedimentary basins that mostly located in active tectonic condition, it is likely that almost all tertiary sedimentary basins in Indonesia have relatively high risk of leakage for CO2 storage as can be seen in Figure 32. In terms of geothermal condition, Indonesian basins are located in tectonic setting positions which

pose high hat flow density, especially for back arc type basins. Heat flow densities appear to decrease regularly from high (to very high) values in the back-arc basins to low on the fore-arc basins. Those geological conditions indicate that great precautions must be taken for selecting particular sedimentary basin in Indonesia for carbon dioxide storage because of high possibility of leakage and the need to find deep formation as CO2 host since the geothermal gradient is high. One alternative that can be used to identify the proper basins for CO2

storage in Indonesia is by selected “mature” basin, where the detailed geological conditions are well known. Basins in this case are selected by its “maturity” in hydrocarbon exploration and production. It is well known that basins with good petroleum play also give advantages for CO2 storage locations. This is especially because the seal-reservoir conditions are well proven. Alternative that can be taken is by selecting mature-depleted petroleum basin. Therefore, CO2 storage can be coupled with enhance oil / gas recovery, what so called “value-added CO2 storage”. Example for this case is some oil / gas field in North East Java or South Sumatera Basins.

Table 11 CO2 Storage Screening Criteria Items Crude Oil: Gravity (API) Viscosity (cp) Composition

Recommended

Current Projects

> 22 27 – 44 < 10 0.3 – 6 High percentage of intermediate components hydrocarbon (especially C5 to C12)

Items

For CO2 miscible flooding

Reservoir: OOIP (Original Oil in Place) (MMbbl.)

> 5 MMbbl. and > 10 wells

Oil Saturation (%PV)

> 20

Type of Formation Average Permeability

15 – 70

Sandstone of carbonate and relatively thin, unless dipping Not critical, if sufficient injection rates can be maintained

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

Recommended

Current Projects

For miscible displacement, depth must be great enough to allow injection pressure greater than MMP, which increases with temperature and for heavier oil. Oil Gravity. API > 40

2,500

32 – 39.9

2,800

28 – 31.9

3,300

22 – 27

4,000 Miscible fails, then screen for immiscible

< 22

Depth must be greater than (in feet)

For immiscible CO2 flooding

13 – 21.9

1,800

(lower oil recovery)

< 13

All oil reservoir fail at any depth

61

KEY DRIVERS OF CCUS PROJECT IN INDONESIA

International standard for CCS and CCUS has been stipulated in ISO 27914 and ISO 27916 respectively. Table 12 ISO 27914 for CCS and ISO 27916 for CCUS No

Items

ISO 27914 for CCS •

1

2

Selection and characterization of the geological storage site Risk and safety assessment

•

Practical (more detail including well • design, injection operation, and • site closure) • No utilization of existing data

Practical (more detail)

3

Monitoring

• •

4

Financial provision

No description

5

Liability

No description

6

Environment

Just few requirements

There are several types of CO2 storage that are available in Indonesia as explained by Best et al., 2011. First, a saline aquifer is predicted to be identified in the Natuna region. However, there has been no detailed study to identify saline aquifer storage opportunities in Indonesia presently. The capacity and its distribution still remain in question. A long oil exploration and production history in Indonesia has left a legacy of many depleted oil and gas fields

Integrity of seal Identify leakage pathway Utilization of existing data

Focus on loss of containment

Practical Storage / leakage monitoring

V. 1. CO2 Storage Capacity

62

ISO 27916 for CCUS

Focus on loss of containment • Leakage monitoring only • A lot of existing wells are supportive to monitor the movement of CO2 plume, but could be a leakage pathway No description The existing regulatory requirements could be applied for the transfer of liability No description

that could be used for potential CO2 storage. This type of storage is preferable due to well characterized reservoirs and existing infrastructure and may reduce exploration costs in finding new sites. However, studies in Indonesia acknowledge that abandoned oil and gas fields possess a higher leakage potential through existing well penetrations that must be mitigated properly. Most notably key areas would include South Sumatra, East Kalimantan and Natuna for CO2 storage. These regions are suitable due to geological stability and low population density.

Among issues that have been discussed in relation to storage in Indonesia is it’s location near volcano and earthquake zones which need to be considered. Although South Sumatra appears to be somewhat risky in terms of seismic and tectonic activity, a recent study conducted by LEMIGAS showed if those activities are present the distribution of earthquake hypocenters is deep (>150 km), and only very scattered. Refers to LEMIGAS data, the most depleted oil and gas reservoirs is located in Sumatera Island with total potential of CO2 storage circa 373 MMTCO2 (million metric ton of carbon dioxide) as can be seen in Figure 34.

200

NORTH SEA

200-430 2,000-21,000 100

300

1,210-4,130 100 140

1-5 5-30

5-25 47-63

9

12 140

23

7

2,000 2-228

HIGH CONFIDENCE MEDIUM CONFIDENCE LOW CONFIDENCE VERY LOW CONFIDENCE

220-410

150

16

Figure 33 CO2 Geological Storage Capacity (Zapantis, 2021)

R

R

 (

 (

,1'21(6,$

R

R

 1

 1

N orth Sumatr a Basin

Tarakan Basin



R

Centr al Sumatr a Basin



R

K utai Basin Salawati Basin Barito Basin South Sumatr a Basin

N orth–East J ava Basin

N orth–W est J ava Basin

R

R

 6

 6

N 'HSOHWHG2LO5HVHUYRLUV007&2

100 200 300 400 500



'HSOHWHG*DV5HVHUYRLUV007&2

Kilometers

3URYLQFLDO%RXQGDU\ ,QWHUQDWLRQDO%RXQGDU\ %RXQGDULHVDUHQRWQHFHVVDULO\DXWKRULWDWLYH

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

R

 (

R

 (

MMTCO The Latest Status of CCS in Indonesia. Jakarta.

.

Figure 34 Indonesia CO2 Storage Capacity Distribution

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

63

KEY DRIVERS OF CCUS PROJECT IN INDONESIA

V. 2. Decarbonization / carbon neutral target timeline Energy Transition Toward NZE Fossil Fuels

Clean Technology (CCT,CCUS) + Net Sink

Fossil Fuels

Energy Sovereignty

Green Energy Availability, Accessibility, Affordability, Sustainability & Competitiveness

New and Renewable Energy

Energy Security

NRE Acceleration:

- Primary/Final Energy substitution (BBN, Co-Ćring, RDF/SRF) - Conversion of fossil fuels - Rooftop PV as the major contributor of NRE development - Non Electricity NRE utilization /Non BBN (Briquette, Biogas, CBG).

- EV - Battery - Hydrogen

Sustainable Development Climate Resilience and Low Carbon

Smart Energy, Smart Grid, Energy Conservation

Figure 35 Energy Transition toward Net Zero Carbon (NZE), (Kusdiana, 2021)

64

Refers to Best et al., 2011, there are multiple industry sources of CO2 in Indonesia such as power plants, oil and gas processing plants, steel and ammonia plants and cement factories. CO2 sources from power and industry however is more challenging because Indonesia has a lot of small scattered coal plants rather than the large localized plants found elsewhere. This delocalization of point sources takes away the benefits that can be gained through a pipeline network and the clustering of CO2 sources

CO2 streams coming from acid gas recovery from LNG plants, refineries, ammonia plants and natural gas processing.

Typically CO2 sources in Indonesia can be subdivided into two groups – Flue Gas and Pure CO2 Streams. Flue gas normally has a low CO2 concentration and low pressure and the sources are power stations, powered by coal or natural gas. With sources from pure

With a current electrification ratio (64%) the growth of electricity demand in Indonesia is expected to remain strong in the next few decades to supply electricity particularly in remote areas. Responding to this demand growth, PLN (the State Owned

Most industrial CO2 sources are located in Jawa and Sumatera, and to a lesser extent in Kalimantan and Sulawesi Islands. Total industry generated CO2 emissions in these areas including from oil and gas processing are estimated to about 17.5 million tons per annum (lower case estimate).

Electricity Enterprise) issued a Ten-Year Electricity Development Plan to build several power plants that would be dominated by coal. Hence, in the future, coal-fired power generation will be the main contributor of CO2 emissions in Indonesia.

Indonesia’s Emission Reduction Roadmap (2020-2035) 800

Hydro

Solar

Wind

700

Geothermal

Bioenergy

C0-Ćring

600

Biofuel

NRE Mix

MBOE

500 23%

400 300

13%

15%

14%

17%

25%

26%

27%

28%

28%

28%

2027 2028

2029

2030 2031

2032

26%

28%

28%

2033 2034

2035

28%

19%

200 100 0

2020 2021

2022 2023

2024 2025 2026

0

EV Low Carbon Fuel Other (Post Mining Reclamation)

377,08

Biofuel

Co -Ćring Energy Efficiency Clean Generation Technology

362,72

335,92

NRP PP

347,91

323,43

284,83

260,38

314,01

400

241,27

350

196,76

300

219,87

159,15

250

132,42

94,87

200

113,37

100 150

64,37

50

Milion Tonnes CO2e

• Energy mix in 2020 is 11,2% and is targeted to reach 28% in 2035. • 2020 contributed to 64,36 MTCO2e of GHG emission reduction. The NDC target is expected to be achieved in 2030, and by 2035. the emission reduction will reach 377,08 MTCO2e . • Emission reduction is accelerated through: a. Provision of electricity through NRE generators, b. Application of energy efĆciency, c. Use of Blofuels; d. Implementation of biomass coćring to reduce coal consumption for Coal PP, e. Utilization of electric vehicles, and f. Transition to low-carbon fuels and clean generatlan technologies.

Figure 36 Indonesia Emission Reduction Roadmap 2020 – 2035, (Kusdiana, 2021)

Nationally Determined Contribution (NDC) is a country implementation design as a part of commitment to Paris Agreement. Indonesia has been submitted its NDC to UNFCCC in 2016. NDC is a set up planning regarding the amount of GHG reduction which should be achieved by several sectors in a period of time. The targeted sector for Indonesian NDC are energy, waste, industry, agriculture, and forestry. The NDC in energy sector aims to achieve GHG reduction 314 to 398 million tons by 2030 as can be seen in Figure 36.

Power generation roles is under new and renewable energy (EBT) and clean energy subsectors. The GHG reduction target of power generation for renewable energy is 93.71 million tons, while for clean energy is 74 million tons. Since the electricity business is fully controlled by PLN in Indonesia, it has significant role to ensure the scenario and planning are well implemented. In the NDC’s 2030 target for energy sector, CCS / CCUS is not included. But it is considered as other mitigation actions (potential) in road map.

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

65

KEY DRIVERS OF CCUS PROJECT IN INDONESIA

NDC’s 2030 Target: Energy Sector ENERGI 314 Juta Ton CO2e

Eneri EĆsiensi

EBT

Energi bersih

Fuel Switching

AFOLU

41,76 Juta Ton CO2e

183,66 Juta Ton CO2e

74,00 Juta Ton CO2e

9,59 Juta Ton CO2e

5,00 Juta Ton CO2e

Komersial

Rumah tangga

Industri

Direct

Direct

Direct

21,41

Direct

Indirect

10,28

Indirect

Indirect

1,91

Penghematan energi Komersial: • Listrik 165 ktoe

Indirect

25,87

Penghematan energi Rumah tangga: • Listrik 2.245 ktoe

Transportasi

Penghematan energi Industri: • Batu bara 3.302 ktoe • BBM 586 ktoe • Gas 1.649 ktoe • Listrik 892 ktoe

Industri

27,28

Power

93,71

Transportasi 62,66

20,35

Penghematan energi Transportasi: • BBM 6.395 ktoe

Penambahan terhadap 2010 Industri: • Penggunaan biomassa 4.775 ktoe • Penggunaan biofuel 4.92 ktoe

Note: CCS/CCUS is not included in the First NDC, but regarded as other mitigation actions (potential) in Road Map.

Pembangkit Listrik: • Tenaga air 3.993 ktoe • Panas bumi 3.210 ktoe • Solar & wind 352 ktoe • Biomassa 143 ktoe • Biofuel 676 ktoe

Penambahan biofuel terhadap 2010 Transportasi • Penggunaan biofuel 20.041 ktoe

Power

Rumah tangga

CCT

39,34

GAS

34,66

Pembangkit listrik • SC 1.770 ktoe • USC 5,978 ktoe • PLTG & PLTGU Gas 7.852 ktoe

9,59

Penambahan gas terhadap 2010 Rumah tangga • Penggunaan gas dan LPG 6.610 ktoe

Figure 37 Nationally Determined Contribution 2030 Target for Energy Sector (Director General for Climate Change, 2021)

PLN cooperated with World Bank successfully released a joint study report: Carbon Capture and Storage for Coal-Fired Power Plants in Indonesia in 2015. In February 5, 2021, PLN which represented by Electricity System Planning Division, held a webinar to respond the flourishing of CCS / CCUS. The study took two major coal power plants located in South Sumatera and West Java as the object of the study. The capacity of coal power plant in South Sumatera is 600 MW, while in

66

West Java is 2 x 1,000 MW. Three carbon capture scenarios are deployed to analyze the potential emission reduction as well as the economic calculation. The scenarios are 90%, 45%, and 22.5% of CO2 capture. PLN explained that the implementation of carbon capture on their power plant will reduce the power plant capacity as about 70 percent of the steam that would normally be passed though the low - pressure (LP) steam turbo generator would be required for amine solvent regeneration in the

CO2 capture plant. Therefore, this condition reducing the yield of electricity. At 90% of CO2 capture, the power reduction for 2 x 1,000 MW West Jawa power plant is 27.5%. While the power reduction for 600 MW South Sumatera power plant at the same level of CO2 capture is 30.8%. The power reduction also increase the LCOE of each power plant. The comparison of net capacity and LCOE on various CO2 capture scenarios can be seen in Figure 38.

Figure 38 Impact of CCS to Capacity and Levelized Cost of Electricity (LCOE)

Figure 39 Total CCS Investments for South Sumatera and West Java Coal Power Plant

PLN put an attention to the reduction of net capacity and the increase of LCOE, especially for Independent Power Producer (IPP) that cooperated with PLN for electricity supply. Even though the electricity supply to PLN from IPP’s power plant is decreasing due to CO2 capture, PLN still has to pay the power at the normal capacity level. This happens since there is no

such a compensation or offset for power reduction due to CO2 capture in the power purchase agreement. In addition to that, the estimated CCS investment for power plant is circa 60% of the power plant CAPEX as can be seen in Figure 39. Hence, PLN is less preferable to install CO2 capture in both their and IPP’s power plant.

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VI

ISSUES AND CHALLENGES OF CCUS IN INDONESIA Table 13 EOR Gas Injection Activities in Indonesia No

Field Name

Status

EOR Type

EOR Production 1,600 MBO 1995 – 1999 (cumulative) 1,200 MBO 2000 (cumulative) Year

1

Handil (phase I)

Full Project

Lean gas injection

2

Handil (phase II)

Full Project

Lean gas injection

3

Jatibarang

Under Study

CO2 Injection

2012

n/a

4

Gemah

Under Study

CO2 Injection

2012

n/a

VI. 1. Technology Readiness (+CO2 EOR/EGR)

Remarks Successful Successful Laboratory and simulation Laboratory and simulation

production, and in extending the field’s life. The project may still be effective for the field for the next According to Abdurrahman et al., 2017, several decades. With this successful the CO2 EOR trial has been initiated experience, many other operators have at Jatibarang and Gemah fields in been triggered to make a start at least 2012 as can be seen in Table 13. At EOR initiative by performing laboratory that time the EOR purpose is for study researches and field trials. The through laboratory and simulation. initiation has been fully supported by various research and higher education Indonesia has been experiencing institutions. For the time being, a huge-scaled steamflooding the most common methods to be project in Duri Field since 1985. It experimented for implementation are is still operating today and even still chemical and gas injection especially expanding to some neighbouring CO2. areas. This project has been a benchmark for the government and In addition to existing CO2 injection operating companies in applying EOR. study at Jatibarang and Gemah fields, The steamflooding has been proved LEMIGAS allocated its capability as an EOR method in improving oil in supporting a pilot project at the production; in this case, heavy-oil Sukowati in 2018. Refers to ADB, the

68

Sukowati field has been in production decline for several years, reaching around 9,000 b/d at present—down from a peak of 46,137 b/d in 2011. Associated gas production is running at 13 million cubic feet per day—less than half its CO2 = carbon dioxide. Source: Global CCS Institute. CCS Image Library - Carbon Capture and Storage Images. https://www.globalhistoric peak in 2011. ccsinstitute.com/resources/ccs-image-library/ (accessed 14 October 2019). The current recovery Figure 40 Illustration of Carbon Dioxide-Enhanced Oil Recovery factor from the field is (Asian Development Bank, 2019) about 39%. Around achieve 1 million BOPD in 2030 as 219,000 b/d of water is currently can be seen in Figure 41. In order to being injected into the field to boost production. ADB is providing technical achieve that number, the Indonesian government set several strategies such assistance to Pertamina EOR—the as work routine program, resource owner and operator of the field—and the CoE to support the development of to production transformation, EOR, increase in exploration activities, the proposed pilot project new technology application, and procurement process simplification & The Indonesian government officially flexibility. set an oil production outlook to

Oil Production Outlook

Oil continues its decline but now we focus to 1 Million BOPD

thousand bopd

1.600

Crude demand

1.400

Crude import

1.200 1.000

Acquisition

800

1 billion bopd in 2030

600

• Resources to Production transformation, • EOR,

400

• Exploration activities

200 -

Existing production 2020

2025

2030

2035

2040

The strategy to crease in production by 1 million bopd (BaU, R to P, EOR and Exploration) including Work Routine Programe, Resource to Production transformation, EOR, increase in exploration activities, New Technology Application and also Procurement Process SimpliĆcation & Flexibility

Figure 41 Oil Production Outlook (Director General of Oil and Gas, Ministry of Energy and Mineral Resources, 2021)

Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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ISSUES AND CHALLENGES OF CCUS IN INDONESIA

CO2 EOR Key Technical with Gas Field Development Planing FLOOD PREDICTION

ECONOMIC EVALUATION

INCREMENTAL RECOVERY

WATER DISPOSAL

UPFRONT INVESTMENTS

CAPEX/OPEX

PROCESS DESIGN

INJECTIVITY

UPGRADING/ ADDITIONS

ECONOMIC TIMING

TIMING

FLOSTREAMS PURCHASE CO2 AND WATER

RESERVOIR DESCRIPTION ORIGINAL OIL IN PLACE

CO2 SUPPLY SUSTAINABILITY

PERMEABILITY

DEPOSITIONAL MODEL

CO2 SOURCES

CRITICAL SATURATIONS

DEPTH

RELATIVE PERMEABILITY DATA

POROSITY

PRESSURE

SHIPPING OR TRUNK LINE TO PROJECT NEGOTIATIONS and PURCHASE OR UTILIZATION

CO2 PROJECT CO2 EOR STUDY

SCREENING RESERVOIR DEPTH

SLIM TUBE

OPERATING PRESSURE

FRAC PRESSURE

FLUID ANALYSIS

ECONOMIC THROUGHOUT

Figure 42 CO2 EOR Key Technical Aspects (SKK Migas, 2019)

FACILITIES and HANDLING SURFACE HANDLING WELLS DESIGN GAS/CO2 PROCESSING

PVT ANALYSIS

The success of CO2 EOR implementation depends on several key technical aspects such as flood prediction, reservoir description, screening, economic evaluation, CO2 supply stability, and facilities and handling as can be seen in Figure 42. CO2 EOR is technically similar to CCUS. Refers to SKK Migas, the peak of oil production of potential CO2 EOR implementation will be achieved in 2042. The production profile can be seen in Figure 43.

Production Potency with CO2 EOR 300000 275000 250000 225000

Figure 43 CO2 EOR Potential Production 2020 – 2060 (SKK Migas, 2019)

200000 175000 150000 125000 100000 75000 50000 25000

20

2 20 0 21 20 2 20 2 2 20 3 24 20 2 20 5 2 20 6 27 20 2 20 8 2 20 9 3 20 0 31 20 3 20 2 3 20 3 34 20 3 20 5 3 20 6 37 20 3 20 8 39 20 4 20 0 41 20 4 20 2 4 20 3 44 20 4 20 5 4 20 6 47 20 4 20 8 49 20 5 20 0 51 20 5 20 2 5 20 3 54 20 5 20 5 5 20 6 57 20 5 20 8 59 20 60

0

70

VI. 2. Supporting Regulations and Policies The Indonesian government also prepare the government regulation about Carbon Pricing. The latest status upon this regulations is now on the finalization phase. The regulation will comprise of carbon pricing mechanism. It divided into carbon trading through emission limit and emission offset, performance based payment, incentive and disincentive, and other mechanism as per the development of science and technology and sector capacity. It will also covers the regulations and policies to support Carbon Capture and Storage/Carbon Capture, Utilization and Storage (CCS / CCUS) activities

in Indonesia not only for technical perspective, but also safety and economical aspects. The draft can be seen in Figure 44. The information regarding the update on the latest regulations and policies about CCS / CCUS has been prepared by Center of Excellence CCS/CCUS and supported by Asian Development Bank (ADB). As quoted from Director General Oil and Gas, Tutuka Ariadji, in The 17th Annual Meeting Oil and Gas Recovery for Indonesia (OGRINDO) on Friday, May 21, 2021. In addition to CCS / CCUS regulations and policies by MEMR, Directorate General of Taxation, Ministry of Finance (MoF) is on discussion to

Figure 44 Draft of Presidential Regulation about Carbon Pricing

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ISSUES AND CHALLENGES OF CCUS IN INDONESIA

prepare a draft regarding an update for Ketentuan Umum dan Tata Cara Perpajakan (KUP) about carbon pricing. The government will set the carbon tax tariff at IDR 75,000 per kg CO2. The purpose of this regulation is to control the GHG to support Indonesia’s NDC and change the behavior of economic activity which potential to emit carbon. VI. 3. Political Will CCUS/CCS technology is considered key to mitigating climate change by international institutions and governments around the world including Indonesia. The technology is considered advantageous because it may enable the continued utilization of fossil fuels while curbing carbon emissions. However, in the context of electricity, investment and cost to kick in the operation of CCUS/CCS will likely to be borne by electricity utility company such as PLN due its heavy reliance on coal, until it is able to distribute the cost to its high-middle income power consumers.

72

PLN as an state-owned company, we believe will follow what existing governance wants in terms of coal reliance for electricity. Influence from coal-related business owners who also in the same time diving in the politics will push enormous efforts to make coal presence as long as it could in Indonesia power posture. This actually could be a main entry point for CCS/ CCUS to play over, in order to align with environmental targets but in the same time maintain coal presence for electricity. We see that carbon tax policy will be the most significant and noteworthy step for current administration if they were able to put the policy officiated. The influence of coal-conglomerates in Indonesian government apparently, could become a push-driver for CCUS activities or contrary a setback.

VII

REFERENCE

Abdurrahman, M., Permadi, A., Bae, W., & Masduki, A. (2017). EOR in Indonesia: past, present, and future . International Journal of Oil Gas and Coal Technology, 251-270. Amijaya, D. H. (2011). Selecting Location for CO2 Storage in Indonesia: Risk Assessment on a Basinal Scale. SPE Asia Pacific Oil & Gas Conference and Exhibition. Asian Development Bank. (2019). Carbon Dioxide-Enhanced Oil Recovery in Indonesia. Manila: Asian Development Bank. Best, D., Mulyana, R., Jacobs, B., Iskandar, U. P., & Beck, B. (2011). Status of CCS Development in Indonesia. Energy Procedia , 6152-6156. Department for Business, Energy & Industrial Strategy. (2021, May). Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/984119/industrial-carbon-capture-icc.pdf Director General for Climate Change. (2021, May 7). Policy and Regulation to Support CCS/CCUS Implementation. Jakarta: Ministry of Environment and Forestry. Director General of Oil and Gas, Ministry of Energy and Mineral Resources. (2021, January 28). Outlook and Challenges for the Oil Industry Standing at The Crossroads: Contributions and Strategies for a Sustainable Society. Japan Cooperation Center Petroleum International Symposium. Direktorat Jenderal Pajak. (2021, June 30). Membangun Sistem Perpajakan yang Adil, Sehat, Efektif, dan Akuntabel. Direktorat Jenderal Pajak. Global CCS Institute. (2021). Global Status of CCS 2020. Global CCS Institute. Institute, G. C. (2016). Understanding Industrial CCS Hubs and Clusters. Melbourne: Global CCS Institute. Kapetaki, Z., & Scrowcroft, J. (2017). Overview of Carbon Capture and Storage (CCS) demonstration project business models: Risks and Enablers on the two sides of the Atlantic. Energy Procedia, 6623-6630.

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Sihombing, M. M. (2020). Bachelor Thesis. Achieving Future Low Carbon Systems in Indonesia: Techno-Economic Analysis of Arun Field CCS Potential and Carbon Tax Price Study. Institut Teknologi Bandung. SKK Migas. (2019, March 14). The Potential of CO2 EOR in Indonesia. Indonesia Japan CCUS Symposium. Sugihardjo, U., Sismantono, D., Lubad, A. M., Hedriana, O., & Sugiyanto, A. (2017). Techno-Economic Evaluation of Carbon Capture Storage Ready for Coal-Based Power Generation in Indonesia. SPE/IATMI Asia Pacific Oil & Gas Conference and Exhibition 2017. Sule, M. R. (2020, October 29). State of Development in Carbon Capture, Utilization and Storage in Indonesia and Future Perspectives. Singapore International Energy Week 2020. Sule, M. R. (2021, May 7). Sequestration & Geological Opportunities in Indonesia. Southeast Asia Carbon Capture, Utilization and Storage (CCUS) Conference. Usman, Iskandar, U. P., Sugihardjo, & S, H. L. (2014). A Systematic Approach to Source-Sink Matching for CO2 EOR and Sequestration in South Sumatera . Energy Procedia, 7750-7760. Wibowo, A. (2020, October 6). CCUS Activities in Indonesia. Japan CCS. Wibowo, R. A., Hindadari, W., Alam, S., & Parada D. Silitonga, R. R. (2008, April 20-23). Fractures Identification and Reservoir Characterization of Gas Carbonate Reservoir at Merbau Field, South Palembang Basin, Sumatra, Indonesia. San Antonio, Texas, United States. World Bank Group. (2015). Carbon Capture and Storage for Coal-Fired Power Plants in Indonesia. Washinton: The World Bank. Zapantis, A. (2021, May 7). The Future of CCUS Commercialization for Developing Economies. Global CCS Institute.

Report Composer: • Alexander Ginting • Rikordias Siahaan • I Putu Putra J. Parwatha Indonesian Carbon Capture, Utilization & Storage (CCUS) Report; Potential & Opportunities

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Petromindo Research Division Jl. Melawai Raya No. 21C, Jakarta Selatan Indonesia

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