Techno-Economic Modeling of Dual-Purpose LNG CO2 Shipping

Source to sink matching is a critical determinant for the feasibility of Carbon Capture, Utilization, and Sequestration (CCUS) projects as transportation costs scale up with distance. Typically, sources of CO₂ like chemical and power plants are not in close proximity to potential use and storage (sinks), thereby rendering CCUS projects infeasible. The use of pipelines to transport CO₂ has added excessive capital costs and the threat of sunk capital costs to existing projects. Utilizing the explosive growth of the LNG/LPG shipping industry can substantially lower the costs and de-risk transportation of CO₂ for CCUS. In this scheme, importers of natural gas capture CO₂ and transport it via specially designed dual-purpose vessels to exporters that have aging fields offshore or near to shore for utilization through enhance oil recovery. In this work, we analyze the techno-economic feasibility of this proposition to present the incentives that dual-purpose ship transport can provide- transportation over long distances at a fraction of prevalent costs, elimination of operating costs for an empty vessel on its return journey, the flexibility to route CO₂ where it’s needed, and the economic benefit of sequestration. The results demonstrate that transportation costs are not a bottleneck in the value chain and can be reduced by an order of magnitude from $16-$30 to $2-$3 per ton of CO₂. We discuss specific source to sink matching for importers that are likely to rely heavily on fossil fuels to meet their energy requirements. This provides an opportunity to reform current economics and policies around carbon management for climate change mitigation with a three-way payout mechanism to the capture, charter and sequestration stakeholders.