Al-Shaheen Gas Flaring Reduction & Gathering Project

1. Al-Shaheen Gas Flaring Reduction & Gathering Project Summary Conclusions Recommendations

2. Presentation Contents • Qatar, and Global Emissions • El-Shaheen Gas Flare Reduction and Gathering (GFR&G) Project • Lesson Learned for other GFR&G projects • Conclusions

3. Qatar & CO2 Emissions • In 2002, Qatar emitted 28 million tons of CO2 • Only 0.13% Global emissions... • ...but about 37 t per capita compared with... • 27 t per capita in USA • ...or roughly 10 t in UK and Denmark • ...or roughly 2.5 t in China Qatar Takes this Seriously!

4. Qatar’s Actions • Qatar acceeded to the Kyoto Protocol on 11 January, 2005 • HSE Regulation Authority designated as National Authority... • ...to deal with Kyoto compliance... • ...sustainable developments making use of... • ...the clean development mechanisms

5. Even Prior to Kyoto Accession • Qatar made a major investment at Al-shaheen • The $300 + million project was started in 2002 and completed during 2004 between 2004 and 2020.... • ...32 million tonnes of high quality hydrocarbons will be exported to processing plants in Qatar’s industrial complex • Equivalent to 230 million barrels of oil • ...84 million tonnes of CO2 emissions will be avoided at El-Shaheen oil production operations Project will cap El-Shaheen’s CO2 emissions and will avoid almost 4 years of National emissions at 2002 levels

6. Million t/y 6 5 4 3 2 1 Gas exports 32 million t 12 million t Gas Flared

7. Significant CO2 Emission Avoidance Of which 32 million t was before 2005

8. Economic Benefits 1.23 Mt gas saved during 2005 was worth $369 million At $42/b oil equivalent Lifetime revenue addition will be over $10 billion at $42/boe

9. Low Cost of CO2 Avoidance by Gas Flare reduction at Shaheen CO2 avoidance costs in Annex I countries are high EU ETS at € 23/t Al-Shaheen GFR cost $350M/84M = $4.17/t CO2

10. Additional Economic BenefitsQatar can trade this advantage • Most industialized nations cannot meet their Kyoto obligations from reductions within their borders • Such reductions are costly for highly industrialized nations • The Kyoto process makes it attractive for Annex I countries to purchase less costly Certified Emission Reductions from Annex II countries, like Qatar Qatar can benefit from these trades

11. Al-Shaheen Experience Shows that Gas Flaring... • ...in a hydrocarbon constrained Globe • ...wastes valuable resources – and money! Gas Flare reduction & gathering... • …increases hydrocarbon reserves • …pays off the investment rapidly • …reduces CO2 emissions at low cost Further GFR projects are also likely to benefit Qatar & the Environment

12. CO2 is a vital resource for Qatar’s Hydrocarbon Future • When hydrocarbons are transformed or burned, CO2 is formed • CO2 released into the environment increases already high atmospheric concentration • CO2 captured from industrial processes in Qatar can be returned to the oil or gas reservoir .... • ...to enhance the recovery and increase the reserves of Qatar’s valuable hydrocarbons

13. Which EOR Gas ?

14. produces 3 barrels Incremental oil 1 ton captured CO2 at $10 - $30

15. Coal Gasification NorthDakota LaBarge Wyoming Utah Colorado McElmoDome Sheep Montain California Oklahoma Arizona AmmoniaPlant BravoDome Mississippi St. JohnDome NewMexico JacksonDome Texas CO2-Sources PermianBasin Louisiana Natural Gas Plants Industrial Pipelines CO2 is already in wide-spread use Industrial sources have always been important 73 CO2-miscible floods, 2004 USA & Canada (OGJ)

16. Global EOR Potential Enormous(2004 Estimate – Dave Beecy, US DOE) Mostly in the Gulf

17. Potential for Qatar • Qatar’s proven oil reserves are ~ 15 billion barrels (OPEC Annual Report, 2004) • Probable Original Oil in Place, 37 billion barrels (speculative) • Experience in carbonate reservoirs of the West Texas Permian indicates that recoverable oil reserves can be boosted by between 5 and 20%... • …or in Qatar by between 1.8 and 7.5 billion CO2 -incremental barrels… • …thereby extending Qatar’s oil production life by between 5 and 20 years (at today’s rate of 1 million bbls/day)

18. How much CO2 is needed? • At an industry average of 3 barrels of incremental oil from 1 ton of CO2 injected & permanently sequestered... • ...Qatar will therefore need to supply its oil fields with between 600 and 2000 million tons of CO2 over the lifetime of EOR • …thus taking a Globally significant quantity of CO2 from the atmosphere Global Emissions of CO2 during 2003 were ~ 24,000 million tons

19. Where will the CO2 Come from? • Sour gas production & treatment • Gas to Liquid industries • LNG plants • Ammonia and hydrogen production • Other petrochemicals • Oil refining • Cement and other manufacturing plants • Power generation & water desalination • Other industries and possibly imports

20. Next Steps • Strengthen the National Regulation Authority in Qatar to.. • ..develop a CO2 reduction strategy taking into account • Qatar’s economic interests • Economic and environmental interest’s of Qatar’s many Global trading partners • Growing need for energy efficiency • Longer term diversification of energy resources • Development of a National CO2 inventory for Qatar... • ...listed according to cost and feasibility of capture • Development of an inventory of CO2 sinks • Listed acording to suitability for EOR or EGR (enhanced gas recovery)

21. Thank you!