Project: ACT Acorn Feasibility Study

Transcription

1 Project: ACT Acorn Feasibility Study Terms of Use The ACT Acorn Consortium partners reserve all rights in this material and retain full copyright. Any reference to this material or use of the material must include full acknowledgement of the source of the material, including the reports full title and its authors. The material contains third party IP, used in accordance with those third party s terms and credited as such where appropriate. Any subsequent reference to this third party material must also reference its original source. The material is made available in the interest of progressing CCS by sharing this ACT work done on the Acorn project. Pale Blue Dot Energy reserve all rights over the use of the material in connection with the development of the Acorn Project. In the event of any questions over the use of this material please contact info@pale-blu.com.

2 Acorn 10196ACTC-Rep January ACT Acorn, project , has received funding from BEIS (UK), RCN (NO) and RVO (NL), and is co-funded by the European Commission under the ERA-Net instrument of the Horizon 2020 programme. ACT Grant number

3 Contents Contents Document Summary Client Project Title Title: Distribution: Research Council of Norway & Department of Business, Energy & Industrial Strategy Accelerating CCS Technologies: Acorn Project Client & Public Domain Date of Issue: 8 th January 2018 Prepared by: Steve Murphy (Pale Blue Dot Energy) Approved by: Sam Gomersall, Commercial Director (Pale Blue Dot Energy) Amendment Record Rev Date Description Issued By Checked By Approved By V01 08/01/18 First Issue S Murphy T Dumenil S Gomersall Disclaimer: While the authors consider that the data and opinions contained in this report are sound, all parties must rely upon their own skill and judgement when using it. The authors do not make any representation or warranty, expressed or implied, as to the accuracy or completeness of the report. The authors assume no liability for any loss or damage arising from decisions made on the basis of this report. The views and judgements expressed here are the opinions of the authors and do not reflect those of the client or any of the stakeholders consulted during the course of this project. The ACT Acorn consortium is led by Pale Blue Dot Energy and includes Bellona Foundation, Heriot-Watt University, Radboud University, Scottish Carbon Capture and Storage (SCCS), University of Aberdeen, University of Edinburgh and University of Liverpool. ACT Acorn Consortium Page 3 of 36

4 Contents Table of Contents CONTENTS EXECUTIVE SUMMARY INTRODUCTION SCOPE PRE-FEED PROGRAMME FEED PROGRAMME ORGANISATION PROJECT SCHEDULE BUDGET EXECUTION STRATEGY CONCLUSIONS REFERENCES ANNEX 1: BUDGET ASSUMPTIONS ACT Acorn Consortium Page 4 of 36

5 Contents CONTENTS... 3 TABLE OF CONTENTS... 4 FIGURES... 8 TABLES EXECUTIVE SUMMARY INTRODUCTION ACT ACORN OVERVIEW ACORN DEVELOPMENT CONCEPT SCOPE PURPOSE SCOPE CAPITAL VALUE PROCESS PROJECT DEFINITION BASIS PRE-FEED PROGRAMME OBJECTIVES MAJOR DELIVERABLES WORK STRUCTURE WORK SCOPE Engineering Design Subsurface Development Permitting and Consenting Commercial Development Finance and Economics Strategy and Communications Project Management ACT Acorn Consortium Page 5 of 36

6 Contents 5.0 FEED PROGRAMME OBJECTIVES MAJOR DELIVERABLES WORK STRUCTURE WORK SCOPE Technical Definition Development Planning Health, Safety & Environment Commercial Development Finance and Economics Strategy and Communications Project Management ORGANISATION CONCEPT STAGE FEED STAGE PROJECT SCHEDULE SUMMARY SCHEDULE CONCEPT STAGE FEED STAGE BUDGET CONCEPT STAGE FEED STAGE ASSUMPTIONS EXECUTION STRATEGY CONCEPT STAGE ACT Acorn Consortium Page 6 of 36

7 Contents 9.2 FEED STAGE CONCLUSIONS REFERENCES ANNEX 1: BUDGET ASSUMPTIONS ACT Acorn Consortium Page 7 of 36

8 Contents Figures FIGURE 2-1: ACT ACORN CONSORTIUM PARTNERS FIGURE 2-2: KEY AREAS OF INNOVATION FIGURE 2-3: ACT ACORN WORK BREAKDOWN STRUCTURE FIGURE 2-4: ACORN OUTLINE MINIMUM VIABLE DEVELOPMENT PLAN FIGURE 2-5: ACORN BUILD OUT SCENARIO FROM THE 2017 PCI APPLICATION FIGURE 3-1: CAPITAL VALUE PROCESS FIGURE 3-2: UNCERTAINTY IN COST ESTIMATE CLASSES (AFTER AACE 18R-97) FIGURE 4-1: PRE-FEED WBS FIGURE 5-1: FEED WBS FIGURE 6-1: ILLUSTRATIVE FEED ORGANISATION FIGURE 7-1: SUMMARY SCHEDULE FIGURE 7-2: CONCEPT STAGE SCHEDULE FIGURE 7-3: FEED STAGE SCHEDULE FIGURE 9-1: ILLUSTRATIVE EXECUTION ARRANGEMENT FOR FEED Tables TABLE 2-1: ACT ACORN MILESTONES AND DELIVERABLES TABLE 3-1: COST ESTIMATE CLASS DEFINITIONS (AACE 18R-97) TABLE 4-1: PRE-FEED DELIVERABLES TABLE 5-1: FEED DELIVERABLES TABLE 8-1: CONCEPT STAGE BUDGET TABLE 8-2: FEED STAGE BUDGET TABLE 12-1: BUDGET ASSUMPTIONS ACT Acorn Consortium Page 8 of 36

9 Executive Summary 1.0 Executive Summary A plan and budget to progress Acorn beyond the definition resulting from completion of the ACT programme has been developed. Key additional pre-feed activities include additional definition of the capture facilities, commercial agreements and definition of the Storage complex This Concept stage work is estimated to require 12,300 man-hours and cost approximately 1.6million. The proposed FEED programme will progress the project to a maturity and level of definition that results in a recommendation for a final investment decision. The Front End Engineering and Design (FEED) programme outlined in this report is informed by previous FEED studies for the Scottish Power Longannet Demo1, Shell Peterhead and Capture Power Limited White Rose projects. The current ACT Acorn work programme is anticipated to progress the project definition to approximately 5%, (AACE International, 2016). Additional work requires completion before the project can commence FEED. In particular, the preferred options for CO2 capture and storage must be selected, several key commercial agreements must be put in place and a more comprehensive plan for FEED completed. This Concept Stage activity would increase the project definition to around 15 20%. It is estimated to require 12,300 man-hours of activity and cost 1.6million. The FEED programme will add considerable definition to the project and by the time the programme is completed the project definition deliverables should be at 80-90% maturity. The FEED programme is estimated to require 66,000 manhours of activity and cost approximately 15.3million. Illustrative examples of the project organisation required for FEED and an outline execution strategy are proposed. Key roles have been identified. A key element of the Concept stage work is to finalise the plan for FEED. It is likely that additional commercial and financial activity will be required before the actual Final Investment Decision (FID) milestone. ACT Acorn Consortium Page 9 of 36

10 Introduction 2.0 Introduction 2.1 ACT Acorn Overview ACT Acorn, project , has received funding from BEIS (UK), RCN (NO) and RVO (NL), and is co-funded by the European Commission under the ERA- Net instrument of the Horizon 2020 programme. ACT Grant number ACT Acorn is a collaborative project between seven organisations across Europe being led by Pale Blue Dot Energy in the UK, as shown in Figure 2-1. The research and innovation study addresses all thematic areas of the ACT Call including Chain Integration. The project includes a mix of both technical and non-technical innovation activities as well as leading edge scientific research. Together these will enable the development of the technical specification for an ultra-low cost, integrated CCS hub that can be scaled up at marginal cost. It will move the Acorn development opportunity from proof-of-concept (TRL3) to the pre-feed stage (TRL5/6) including iterative engagement with relevant investors in the private and public sectors. Specific objectives of the project are to: Produce a costed technical development plan for a full chain CCS hub that will capture CO2 emissions from the St Fergus Gas Terminal in north east Scotland and store the CO2 at an offshore storage site (to be selected) under the North Sea. Identify technical options to increase the storage efficiency of the selected storage site based on scientific evidence from geomechanical experiments and dynamic CO2 flow modelling and through this drive scientific advancement and innovation in these areas. Explore build-out options including interconnections to the nearby Peterhead Port, other large sources of CO2 emissions in the UK region and CO2 utilisation plants Identify other potential locations for CCS hubs around the North Sea regions and develop policy recommendations to protect relevant infrastructure from Figure 2-1: ACT Acorn consortium partners premature decommissioning and for the future ownership of potential CO2 stores. ACT Acorn Consortium Page 10 of 36

11 Introduction Engage with CCS and low carbon economy stakeholders in Europe and worldwide to disseminate the lessons from the project and encourage replication. CCS is a new and emerging industry. Maturity improvements are required in the application of technology, the commercial structure of projects, the scope of each development and the policy framework. The key areas of innovation in which the project will seek insights are summarised in Figure 2-2. The project will be delivered over a 19-month period, concluding on the 28 th February During that time, it will create and publish 21 items known as Deliverables. Collectively these will provide a platform for industry, local partnerships and government to move the project forward in subsequent phases. It will be driven by business case logic and inform the development of UK and European policy around infrastructure preservation. The deliverables are listed in Table 2-1. Figure 2-2: Key areas of innovation Figure 2-3: ACT Acorn work breakdown structure The project activity has been organised into 6 work packages as illustrated in Figure 2-3. Specific areas being addressed include; regional CO2 emissions; St Fergus capture plant concept; CO2 storage site assessments and development plans; reservoir CO2 flow modelling, geomechanics; CCS policy development; infrastructure re-use; lifecycle analysis; environmental impact; economic modelling; FEED and development plans; and build out growth assessment. ACT Acorn Consortium Page 11 of 36

12 Introduction Milestone Deliverable D01 Kick-off Meeting Report 1) St Fergus Hub Design D02 CO2 Supply Options D17 Feeder 10 Business Case D03 Basis of Design for St Fergus Facilities D04 Site Screening Methodology 2) Site Screening & Selection D05 Site Selection Report 3) Expansion Options D18 Expansion Options D10 Policy Options Report D11 Infrastructure Reuse Report 4) Full Chain Business Case D14 Outline Environmental Impact Assessment D15 Economic Model and Documentation D16 Full Chain Development Plan and Budget D06 Geomechanics Report 5) Geomechanics D07 Captain X Storage Development Plan and Budget D08 Site 2 Storage Development Plan and Budget 6) Storage Development Plans D09 Eclipse Model Files 7) Lifecycle Assessment D12 Carbon Lifecycle Analysis D21 Societal Acceptance Report 8) Project Completion D19 Material for Knowledge Dissemination Events D20 Publishable Final Summary Report Table 2-1: ACT Acorn Milestones and Deliverables ACT Acorn Consortium Page 12 of 36

13 Introduction The Consortium includes a mix of industrial, scientific and CCS policy experts in keeping with the multidisciplinary nature of the project. The project is led by Pale Blue Dot Energy along with University of Aberdeen, University of Edinburgh, University of Liverpool, Heriot Watt University, Scottish Carbon Capture & Storage (SCCS), Radboud University and The Bellona Foundation. Pale Blue Dot Energy affiliate CO2DeepStore are providing certain input material. 2.2 Acorn Development Concept Many CCS projects have been burdened with achieving economies of scale immediately to be deemed cost effective. This inevitably increases the initial cost hurdle to achieve a lower lifecycle unit cost (be that /MWh or /T) which raises the bar from the perspectives of initial capital requirement and overall project risk. The Acorn development concept use a Minimum Viable Development (MVD) approach. This takes the view of designing a full chain CCS development of industrial scale (which minimises or eliminates the scale up risk) but at the lowest capital cost possible, accepting that the unit cost for the initial project may be high for the first small tranche of sequestered emissions. Acorn will use the unique combination of legacy circumstances in North East Scotland to engineer a minimum viable full chain carbon capture, transport and offshore storage project to initiate CCS in the UK. The project is illustrated in Figure 2-4 and seeks to re-purpose an existing gas sweetening plant (or build a new capture facility if required) with existing offshore pipeline infrastructure connected to a well understood offshore basin, rich in storage opportunities. All the components are in place to create an industrial CCS development in North East Scotland, leading to offshore CO2 storage by the early 2020s. Figure 2-4: Acorn Outline Minimum Viable Development Plan ACT Acorn Consortium Page 13 of 36

14 Introduction A successful project will provide the platform and improve confidence for further low-cost growth and incremental development. This will accelerate CCS deployment on a commercial basis and will provide a cost effective practical stepping stone from which to grow a regional cluster and an international CO2 hub. The seed infrastructure can be developed by adding additional CO2 capture points such as from hydrogen manufacture for transport and heat, future CO2 shipping through Peterhead Port to and from Europe and connection to UK national onshore transport infrastructure such as the Feeder 10 pipeline which can bring additional CO2 from emissions sites in the industrial central belt of Scotland including the proposed Caledonia Clean Energy Project, CCEP. A build out scenario for Acorn used in the 2017 Projects of Common Interest (PCI) application is included as Figure 2-5. Pale Blue Dot Energy is exploring various ways and partners to develop the Acorn project. Figure 2-5: Acorn build out scenario from the 2017 PCI application ACT Acorn Consortium Page 14 of 36

15 Scope 3.0 Scope 3.1 Purpose The purpose of this Deliverable (D13) is to outline the activities, resources and effort required in the next phase of the Acorn Development. A key assumption is that the next phase of major activity is FEED (Front End Engineering and Design). Before FEED can commence there are some feasibility-level activities outside the scope of the ACT work programme that must be completed, and these are also described in this report. 3.3 Capital Value Process The capital value process is a project management approach used widely by offshore industry, particularly in the North Sea. The process provides a logical framework within which to develop projects and has a good alignment with the main stages of engineering development, as illustrated in Figure Scope The scope of this deliverable includes; Description of key deliverables Outline of activities required to produce deliverables Estimate of resources required to complete activities Cost estimate Project schedule Potential organisation Key milestones This study has considered previous work on CCS FEED programmes, including the published material from the two UK CCS Demonstration Competitions (ScottishPower CCS Consortium, 2011), (Shell UK, 2016), (Capture Power Ltd, 2016) and preparatory FEED planning work from the Captain Clean Energy Project (CO2DeepStore, 2012). Figure 3-1: Capital Value Process 3.4 Project Definition Basis This work has adopted industry guidelines from The Association for the Advancement of Cost Estimators to assess the level of project definition and for the various classes of cost estimate. These are summarised in Table 3-1. Each class has a different uncertainty range as shown in Figure 3-2. ACT Acorn Consortium Page 15 of 36

16 Scope Class Project Definition (%) Purpose Concept Screening Feasibility Budget Control Check Basis Capacity factored, Judgement, parametric models Equipment factored, parametric models Semi-detailed unit costs Major equipment list Detailed unit cost and material take-off Detailed unit cost and material take-off Table 3-1: Cost Estimate Class Definitions (AACE 18R-97) Figure 3-2: Uncertainty in Cost Estimate Classes (after AACE 18R-97) ACT Acorn Consortium Page 16 of 36

17 Pre-FEED Programme 4.0 Pre-FEED Programme 4.1 Objectives Objective Deliverable There are three primary objectives for this short phase of the project. A. Demonstrate to the Decision Makers a compelling recommendation such that the project is ready to begin FEED on 1 st January At the time of writing, the decision-making body had still to be formed; B. Provide the Decision Makers with a very high degree of confidence that the organisation can deliver the project successfully; and C. Remain flexible & adapt to the possibility that the contract for the next phase is strongly linked to a future full-term Project Contract. 4.2 Major Deliverables The main deliverables that are required to achieve the objectives are outlined in Table 4-1. A B C 1. Contractual terms acceptable to all parties. 2. Evolve bid into a compelling proposition. 1. Fully developed project definition document for FEED which includes those items outside the scope of the current ACT work Programme. 2. Fully specified and costed FEED programme covering all costs recoverable under the FEED contract. 3. Fully specified and costed FEED programme covering all costs not recoverable under the FEED contract. 4. Support of key internal stakeholders and decision makers. 5. Detailed listing of FEED deliverables agreed with Project Developer and supply chain. 6. Have contracts in place with all the contractors for FEED. 1. Maintain clear communication with decision makers, supply chain and financiers. Table 4-1: Pre-FEED Deliverables ACT Acorn Consortium Page 17 of 36

18 Pre-FEED Programme 4.3 Work Structure The 7-part work breakdown structure is illustrated in Figure 4-1, details are provided in Section 4.4. Figure 4-1: Pre-FEED WBS ACT Acorn Consortium Page 18 of 36

19 4.4 Work Scope This section outlines the work that is required to be completed before FEED can commence and is in addition to that covered in the ACT Acorn work programme Engineering Design The ACT Acorn programme contains some Engineering Design work primarily aimed at identifying and describing conceptual designs. For instance, outline design for new build capture and compression facilities at St Fergus. The ACT programme is estimated to be approximately 5% of the final project definition, as illustrated in Figure 3-2. The next phase of engineering activity is to add more definition to the design in each of the following key areas: CO2 capture and conditioning Subsea infrastructure Pipeline Interface with terminal operations Operations requirements This next phase of design work will include the following deliverables. Final Design Basis Selection of best location for CO2 capture Process flow diagram for the CO2 Heat and mass balance Process description Process control philosophy Equipment list Pre-FEED Programme Preliminary piping and instrumentation diagram (P&ID) Effluent summary Preliminary equipment layout Fluid classification Piping classification summary Preliminary instrumentation list Utilities summary Main equipment process data sheets Electrical load list Waste disposal procedure Solvent handling procedures Subsurface Development The ACT Acorn programme contains some Subsurface Development work primarily aimed at identifying two potential storage sites and creating an initial development plan for each of those sites. The next phase of subsurface activity is to add more definition to the design in each of the following key areas: Selection of preferred CO2 storage site CO2 injection strategy Well design Definition of the Storage Complex boundaries At the current time, it is anticipated that the preferred storage site will be at the Captain X site. This area has already been subject to a significant amount of subsurface analysis and there is no current intention to repeat this work. ACT Acorn Consortium Page 19 of 36

20 Pre-FEED Programme Consequently, the next phase of subsurface design work will be limited to the following deliverables. Final Design Basis Seismic interpretation Structural architecture Refinement of reservoir simulation Coordinates of the proposed Storage Complex boundaries Permitting and Consenting The ACT Acorn work programme includes preparation of an initial consents register and an early statement to address the requirements of using the best available technology (BAT). This element of the future scope will progress the major permits and consents such as obtaining an Agreement for Lease from the Crown Estate and a CO2 storage License from the Oil and Gas Authority Commercial Development The ACT Acorn work programme does not contain any commercial development activities. This element of the future scope will progress the initial forms of the following major commercial agreements. Commercial Agreements Register Heads of Terms for the Atlantic pipeline Heads of Terms for procuring flue gas Heads of Terms for provision of services by Terminal Operators Outline Joint Venture company structure Terminal Plant Outline Agreement Finance and Economics The ACT Acorn work programme includes a limited amount of economic analysis on the full chain development plan but does not include an activity related to financing the development. This element of the future scope will include the development of a budget for FEED and a more refined estimate for the project itself. Additionally, a comprehensive risk analysis will be necessary to inform the economic analysis. An initial view of risk allocation between the parties will also be completed Strategy and Communications The ACT Acorn work programme does not contain any strategy of communication development work. The programme does however include a substantial dissemination component, and this is largely focussed on identifying issues related to a just transition to a low carbon economy. This element of the future scope will progress engagement with stakeholders who have a more tangible link to the physical project as well as statutory consultees Project Management In addition to the normal project management activities of coordination and direction, progress reporting, delivery assurance and stakeholder engagement that will be associated with the scope items discussed above the key output from this element of the work will be a recommendation for FEED. The recommendation will detail the scope, budget, resource requirements and schedule of FEED activities as well as the decision support package to justify the recommendation. ACT Acorn Consortium Page 20 of 36

21 FEED Programme 5.0 FEED Programme 5.1 Objectives There are three primary objectives for this phase of the project. A. Demonstrate to the Decision Makers a compelling recommendation such that the project is ready to begin Detailed Engineering and Design; B. Provide the owners and BEIS with a very high degree of confidence that the organisation can deliver the project successfully; and C. Remain flexible and adapt to the possibility that the contract for the next phase is strongly linked to the full-term Project Contract. 5.2 Major Deliverables The main deliverables that are required to achieve the objectives are outlined in Table 5-1. Objective A B C Deliverable 1. Contractual terms acceptable to all parties. 2. Evolve design into a compelling investment proposition. 1. Fully developed project definition document for detailed engineering. 2. Fully specified and costed development programme covering all costs recoverable under the project contract. 3. Fully specified and costed development programme covering all costs not recoverable under the project contract. 4. Support of key internal stakeholders and decision makers. 5. Detailed listing of deliverables agreed with Project Developer and supply chain. 6. Have contracts in place with all the contractors for detailed engineering. 1. Maintain clear communication with decision makers, supply chain and financiers. Table 5-1: FEED Deliverables ACT Acorn Consortium Page 21 of 36

22 FEED Programme 5.3 Work Structure The 7-part work breakdown structure is illustrated in Figure 5-1, details are provided in Section 5.4. Figure 5-1: FEED WBS ACT Acorn Consortium Page 22 of 36

23 5.4 Work Scope This section outlines the work that is required to be completed before a final investment decision (FID) can be made. The WBS is slightly different to that planned for the Concept stage to better reflect the increasing emphasis on Health, Safety and Environment (HSE) and development planning activities as the project matures towards FID Technical Definition The key deliverables currently identified for the CO2 capture and conditioning plant (including flue gas gathering), transport, injection and storage are listed below. Prepare and issue the Basis of Design Calculate the heat and material balances Prepare the general and specific arrangement drawings Prepare piping layouts Prepare process flow diagrams Prepare piping and instrumentation diagrams including material selections and process data sheets Calculate equipment sizes for all major components Prepare equipment lists and system descriptions Prepare single line diagrams for all major electrical equipment Calculate and confirm utility consumption of power, water, and other utilities for all major equipment. Prepare plant water balance Prepare control specifications, control architecture, instrument list and control room layout FEED Programme Calculate the foundation loading for all major power plant equipment, prepare buildings plan Obtain vendor quotations for all major plant equipment Calculate material take-offs for concrete, earth work, structural steel, piping, cable, cable tray, conduit, valving and instruments Prepare installation plan and overall project schedule Technical interface documents Design & coordination registers Specification for the offshore pipeline surveys Offshore pipeline survey report Geotechnical survey specification Pipeline condition report Subsea field layout drawings Subsea manifold cluster layout Control system configuration report Control system schematic drawings Subsea structures definition report Tie-in spool and jumper preliminary design Umbilical routing report Subsurface data collection and maintenance Learning from other projects Core analysis review Sedimentological review Core testing Seismic interpretation Seismic inversion Log interpretation ACT Acorn Consortium Page 23 of 36

24 FEED Programme Pore pressure prediction Static model (field) Static model (Captain Aquifer "fairway") Static model (overburden and underburden) Geological model uncertainty evaluation Definition of injection well data acquisition to fill existing data gaps Dynamic model construction Dynamic reservoir simulations Impact on other subsurface users Wellbore injectivity & near wellbore issues Geochemical modelling Geomechanical modelling Safe operating envelopes Storage complex definition Geological containment Well containment Wellbore stability for new injector wells Specify initial well design criteria Design of new injector wells Impact assessment of environment / health & safety / social issues Subsurface technical risk assessment Monitoring technology feasibility assessment Monitoring plan Refine injection development plan Operational planning - technology maturation plan Operational planning - key operational processes Detailed start-up/shutdown operational processes Prepare +/-10% accurate cost estimate Development Planning The key deliverables currently identified for this element of work are listed below. Full chain development plan and budget Project execution plan Procurement strategy and plan Capital requirement budget Operating cost estimate Health, Safety & Environment The key deliverables currently identified for this element of work are listed below. Environmental impact assessment (EIA) EIA Scoping Report Environmental Statement Obtain consent for pollution prevention and control Obtain consent for Marine License Obtain consents for St Fergus operations Definition of BAT (best available technology) requirements Revised Consents register Scoping document Surveys, investigations & data gathering Consultations Land referencing Mapping & drawing Pipeline routeing Compliance statements ACT Acorn Consortium Page 24 of 36

25 FEED Programme Hazard and operational study (HAZOP) report Hazard identification (HAZID) report Control of major accident hazards (COMAH) report Commercial Development The key deliverables currently identified for this element of work are listed below. Risk allocation model development Develop business model Negotiate revenue model Energy and CO2 supply contracts Negotiate owner s engineering contract Negotiate power purchase contract Negotiate engineering, procurement & construction (EPC) contracts Negotiate operations and maintenance (O&M) contract Negotiate pipeline purchase contracts Negotiate storage joint operating agreement Negotiate 3 rd party access conditions Negotiate contracts for terminal services Negotiate contracts for flue gas supply Negotiate storage lease Negotiate storage licence / permit Negotiate project contracts Interface with technical team Negotiate to establish special purpose vehicle to deliver project Finance and Economics The key deliverables currently identified for this element of work are listed below. Insurance strategy Financial and Economic Model Development Develop Cost Model Funding plan debt, equity & other Develop list of potential investors Decision support package Strategy and Communications The key deliverables currently identified for this element of work are listed below. Stakeholder Management Plan Communications Plan Stakeholder profiling and validation Project Management The key deliverables currently identified for this element of work are listed below. Project management activities of coordination and direction, progress reporting, delivery assurance and stakeholder engagement Recommendation for FID. The recommendation will detail the scope, budget, resource requirements and schedule of detailed engineering and construction activities as well as the decision support package to justify the recommendation Establish project management office (PMO) PMO cost control activities PMO reporting activities PMO control activities Develop and maintain risk register ACT Acorn Consortium Page 25 of 36

26 Organisation 6.0 Organisation 6.1 Concept Stage The organisation for the Concept Stage will be similar to that used in the ACT Acorn programme. Pale Blue Dot Energy will lead the activity and sub-contract certain specialist activities. ACT Acorn Consortium Page 26 of 36

27 Organisation 6.2 FEED Stage To complete the FEED programme a larger and more sophisticated project organisation will be required, as illustrated in Figure 6-1. Figure 6-1: Illustrative FEED Organisation ACT Acorn Consortium Page 27 of 36

28 Project Schedule 7.0 Project Schedule 7.1 Summary Schedule Figure 7-1: Summary Schedule ACT Acorn Consortium Page 28 of 36

29 Project Schedule 7.2 Concept Stage Figure 7-2: Concept Stage Schedule ACT Acorn Consortium Page 29 of 36

30 Project Schedule 7.3 FEED Stage ACT Acorn Consortium Page 30 of 36

31 Project Schedule Figure 7-3: FEED Stage Schedule ACT Acorn Consortium Page 31 of 36

32 Budget 8.0 Budget Budgetary estimates have been prepared for the next two stages of the project development. These estimates are based on the activities identified in Section 7.0, the resources (people, software, fees etc) required to complete them and assumptions about the cost of these resources. 8.1 Concept Stage Work Area Effort (Man-hours) Cost (,000) Subsurface Definition Engineering Definition 2, Commercial Arrangements 1, Permitting & Consenting Finance & Economics Strategy & Communications 4, Project Management 1, Total 12,268 1, FEED Stage Work Area Effort (Man-hours) Cost (,000) Technical Definition 23,050 5,533 Commercial Arrangements 9,340 2,042 Finance & Economics 2, Health Safety & Environment 3, Development Planning 7, Strategy & Communications 8,900 4,042 Project Management 10,960 1,429 Total 65,730 15,276 Table 8-2: FEED Stage Budget 8.3 Assumptions A table of assumptions is provided in Annex 1. Table 8-1: Concept Stage Budget ACT Acorn Consortium Page 32 of 36

33 Execution Strategy 9.0 Execution Strategy 9.1 Concept Stage The execution of the next stage of activity will be similar to the current arrangement. Pale Blue Dot Energy will continue to lead the project development and subcontract certain activities that require specialist expertise. Examples of work that is likely to be supplemented by specialist subcontractors are listed below. The strategy illustrated in Figure 9-1 assumes that BEIS are significantly involved in funding (or otherwise underwriting the cost of) the FEED programme. Other arrangements are possible. Subsea infrastructure design; Capture facility design; and Legal aspects of commercial arrangements. 9.2 FEED Stage The execution of the FEED stage of activity will differ from the current arrangement due to the scale, spectrum of activities, number of parties involved and general complexity. Pale Blue Dot Energy will continue to lead the project development and subcontract certain activities that require specialist expertise. Examples of work that is likely to be supplemented by specialist subcontractors are listed below. Project Management Office Facility and infrastructure design Subsurface analysis Well design Legal, finance and insurance Operations planning Figure 9-1: Illustrative execution arrangement for FEED ACT Acorn Consortium Page 33 of 36

34 Conclusions 10.0 Conclusions 1. Plans and budgets for the Concept and FEED stages of the Acorn project development have been developed. 2. The Concept stage is estimated to require 12,268 man-hours of effort to produce the required deliverables and cost approximately 1.6M. 3. The FEED stage is estimated to require 65,730 man-hours of effort to produce the required deliverables and cost approximately 15.3M. 4. The project organisation for the Concept stage is likely to be broadly similar to the current arrangement where Pale Blue Dot Energy is supported by a few specialist engineering, legal and technical organisations. 5. The project organisation for the FEED stage is likely to be substantially larger than the current arrangement. In particular, a number of specialist companies will be required to provide the detailed technical, commercial and HSE development work. In addition, a more comprehensive project management office function will be needed to properly manage the more complex range of activities and ensure appropriate cost control. ACT Acorn Consortium Page 34 of 36

35 References 11.0 References AACE International. (2016). 18R-97 Recommended Practice Cost Estimation in Process Industires. Association for Advancement of Cost Engineering International. Capture Power Ltd. (2016). K01 Full Chain FEED Summary Report. Capture Power Ltd. CO2DeepStore. (2012). Proposal for the DECC 2012 CCS Commercialisation Programme. ScottishPower CCS Consortium. (2011). Demo 1 KT: SP-SP RT015 Feed Close Out Report. Shell UK. (2016). FEED Summary Report for Full CCS Chain. Shell. ACT Acorn Consortium Page 35 of 36

36 12.0 Annex 1: Budget Assumptions Annex 1: Budget Assumptions Resource Name Type Work Std. Rate Cost/Use Accrue At Cost Advisor Work 40 hrs 150/hr 0 Prorated 6,000 Business Analyst Work 2,160 hrs 120/hr 0 Prorated 259,200 Capture Work 5,510 hrs 100/hr 0 Prorated 551,000 Chief Technologist Work 4,058 hrs 180/hr 0 Prorated 730,440 Commercial Advisor Work 5,190 hrs 180/hr 0 Prorated 934,200 Commercial Director Work 7,097 hrs 180/hr 0 Prorated 1,277,460 Communications Work 500 hrs 60/hr 0 Prorated 30,000 Compression Work 1,920 hrs 100/hr 0 Prorated 192,000 Construction Specialist Work 1,580 hrs 150/hr 0 Prorated 237,000 Environmental Advisor Work 1,400 hrs 130/hr 0 Prorated 182,000 Environmental Engineer Work 790 hrs 100/hr 0 Prorated 79,000 Feeder 10 - Technical Material ,000 Prorated 100,000 Feeder 10 Commercial Material ,000 Prorated 750,000 Feeder 10 Studies Material ,000 Prorated 0 Finance Director Work 400 hrs 160/hr 0 Prorated 64,000 Financial Advisor Work 1,510 hrs 400/hr 0 Prorated 604,000 Geologist Work 1,000 hrs 120/hr 0 Prorated 120,000 Geophysicist Work 1,000 hrs 120/hr 0 Prorated 120,000 Hydrogen - Commercial Material ,000 Prorated 800,000 Hydrogen - Technical Material ,000 Prorated 150,000 Hydrogen Studies Material ,000 Prorated 0 Intelligent Pig Inspection Material 1 0 3,000,000 End 3,000,000 Lease Fees Material ,000 Prorated 100,000 Legal Advisor Work 2,235 hrs 400/hr 0 Prorated 894,000 Marketing Work 600 hrs 60/hr 0 Prorated 36,000 Mechanical Engineer Work 2,350 hrs 75/hr 0 Prorated 176,250 Option Fee Material ,000 End 30,000 Pipeline Work 5,240 hrs 100/hr 0 Prorated 524,000 Pipeline Acquisition Material ,000 End 0 Planning Specialist Work 980 hrs 80/hr 0 Prorated 78,400 Pro Eng Software Work 80 hrs 50/hr 0 Prorated 4,000 Project Accountant Work 1,775 hrs 50/hr 0 Prorated 88,750 Project Economist Work 300 hrs 120/hr 0 Prorated 36,000 Project Engineer Work 6,840 hrs 75/hr 0 Prorated 513,000 Project Manager Work 6,113 hrs 180/hr 0 Prorated 1,100,340 Res Eng Software Work 560 hrs 50/hr 0 Prorated 28,000 Reservoir Eng Work 1,400 hrs 150/hr 0 Prorated 210,000 Shipping Specialist Work 1,100 hrs 75/hr 0 Prorated 82,500 Shipping Studies Material ,000 Prorated 400,000 Shipping Studies - Commercial Material ,000 End 600,000 Snr Process Eng Work 7,540 hrs 120/hr 0 Prorated 904,800 Storage Engineer Work 1,720 hrs 150/hr 0 Prorated 258,000 Subsea Engineer Work 2,740 hrs 120/hr 0 Prorated 328,800 Subsurface Team Leader Work 150 hrs 160/hr 0 Prorated 24,000 Team Travel Concept Phase Material 0 0 5,000 Prorated 0 Team Travel FEED Phase Material ,000 Prorated 20,000 Wells Work 2,120 hrs 120/hr 0 Prorated 254,400 Table 12-1: Budget Assumptions ACT Acorn Consortium Page 36 of 36