Energy Transition

The project will demystify decarbonisation economics. (Image source: Kent)

Kent is collaborating with the UK’s Energy Institute to create guidelines for decarbonisation economics in Greenhouse Gas (GHG) emission reduction projects in the upstream oil and gas industries

This report will provide clear, actionable guidance to help the sector achieve its environmental goals, demystifying the economics of decarbonisation, including the societal cost of carbon. While it will focus on the UK North Sea upstream sector, it will take a global view so that it can serve as a basis for future research across the world. It will involve the collaboration of Kent’s Environmental team, Asset Decarbonisation team, and Energy Environment Economic (E3) Modelling and Communications team.

Key objectives

The guidelines will address the following key objectives:

Demystifying Decarbonisation Economics: Provide clarity for energy professionals with limited exposure to project economics, such as environmental or sustainability managers.
Understanding Carbon Costs: Offer insights into how carbon costs are calculated and influenced by market forces, including societal costs.
Alternative Metrics: Recommend non-standard metrics beyond NPV to ensure that decarbonisation goals are met, delivered as a technical note to the industry.
Justification of Metrics: Articulate and justify the choice of both standard and non-standard metrics used in the guidance.
Upstream O&G Value Chain: Focus on the upstream sector of the O&G value chain affected by decarbonisation and assess the potential to broaden the scope to the full value chain.

"We have seen the challenges of presenting decarbonisation projects against standard project economics with the only justification being the reduced OPEX related to Emission Trading Scheme credits and potential increased revenue from an increase in sales gas quantities from reducing fuel and flare gas," said Graham Filsell, Kent’s Decarbonisation lead. "There is a strong case for the societal cost of carbon and potentially an individual asset marginal abatement cost to form part of the project economics for decarbonisation projects."

James Lawson, chair of USEG (Upstream Environmental Group) added, "Decarbonisation and GHG reduction projects are inherently holistic, involving a wide spectrum of energy professionals, many of whom have not previously engaged in economic assessments and project prioritisation. Furthermore, these projects compete for capital and resources with other industry sectors. Therefore, a clear, concise, and targeted document that all energy professionals can refer to will be invaluable for ensuring that capital and resources are allocated appropriately and in line with net zero commitments."

The range covers every application of the hydrogen value chain. (Image source: Trelleborg)

Trelleborg Sealing Solutions has launched the full H2Pro range of more than 20 sealing compounds for every application of the hydrogen value chain, from production to transport and storage and end-use

Proven to withstand challenging application environments, the materials are suitable for high pressures, low temperatures, and resist permeation, making them better able to withstand rapid gas decompression (RGD), while also demonstrating excellent wear and extrusion properties.

James Simpson, global segment director energy, said, “As the smallest and lightest molecule, hydrogen has the potential to drive the energy transition, but it is difficult and complex to seal.

“The lack of relevant industry standards to validate our materials against was a major challenge when developing the H2Pro range. Some in the nascent hydrogen industry rely on standards used typically for high-pressure gasses in the oil and gas sector, but these are often unsuitable for replicating real-world hydrogen application conditions.

“Trelleborg has developed proprietary testing protocols that replicate real-world hydrogen applications, providing customers with confidence in products to make the energy transition reliable, efficient and economic.”

Trelleborg's proprietary test standards cover hydrogen permeation, endurance validation and hydrogen compatibility, including the ability to withstand rapid gas compression (RGD). Occurring when hydrogen permeates into a seal under pressure, RGD can cause seals to blister and crack when pressure is rapidly relieved.

Aviation is a key focus for Masdar's green hydrogen business. (Image source: Masdar)

Masdar has signed an agreement with TotalEnergies to look at developing a commercial green hydrogen to methanol to SAF (Sustainable Aviation Fuel) project

It follows a successful test flight conducted by the two companies during COP28 in December 2023 that demonstrated the potential for converting methanol to SAF.

The project will help decarbonise hard to abate, emission intensive sectors such as the aviation and maritime industries. The project will also capture and utilise CO2 from an industrial source to be used as a feedstock, in addition to green hydrogen from renewable energy powered electrolysis, for the production of green methanol and SAF.

Aviation is a key focus for Masdar’s Green Hydrogen business, and over the past three years the company has forged a number of strategic partnerships designed to support the development and growth of the SAF sector.

The UAE’s General Policy for Sustainable Aviation Fuel set a voluntary target of providing 1% of fuel supplied to national airlines at UAE airports using locally produced SAF by 2031 and seeks to develop a national regulatory framework for SAF by exploring potential policies to support the long-term economic operation of SAF facilities in the UAE.

The agreement aligns with Abu Dhabi’s Low Carbon Hydrogen Policy which is expected to significantly contribute to promoting low-carbon hydrogen as a future energy source, and the UAE’s National Hydrogen Strategy, which seeks to establish the UAE as a leading global producer of low carbon hydrogen by 2031. Masdar is looking to become a leading producer of green hydrogen by 2030.

The facility will utilise KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia. (Image source: KBR)

KBR has announced that its blue ammonia technology has been selected by Shell for its Blue Horizons low-carbon hydrogen and ammonia project in Duqm, Oman

The facility will utilise KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia. KBR will provide licensed proprietary engineering design for the 3,000 metric tons per day ammonia plant utilising hydrogen produced by Shell's Blue Hydrogen technology.

"We are excited to work with Shell on this breakthrough project in Oman and contribute towards achieving Oman's Vision 2040 targets," said Jay Ibrahim, president, KBR Sustainable Technology Solutions. "Our blue ammonia technology allows our clients to implement their energy transition projects with a cost-competitive solution at the lowest carbon intensity."

KOC contract

This news follows KBR’s earlier announcement that it has been awarded an advisory consulting contract by Kuwait Oil Company for the development of a country wide masterplan for the production of 17GW of renewables and 25GW of green hydrogen by 2050. KBR will provide advisory consulting services to develop a phased strategy for the deployment of wind and solar power, combined with power storage capability. The renewable power capability will be linked to the production of green hydrogen for internal industrial use, as well as for export purposes.