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BP-Tinto Abu Dhabi plant to be ready by 2014

Abu Dhabi , March 21, 2009

A joint venture between BP and Rio Tinto, Hydrogen Energy, is pushing on with the world's first large-scale carbon capture and storage (CCS) project despite the credit crunch hitting both Abu Dhabi and California.

Hydrogen Energy chief executive officer Lewis Gillies said the company was on schedule to commission its $2 billion 500 MW CCS project in Abu Dhabi in 2013 for full commercial operation by 2014 using gas.

'We think we can find a solution through the financial crisis,' he said on the sidelines of a conference on CCS. 'We don't see the current economic environment as a block.'

Its 400 MW project in California, which would use pet coal, was likely to start operation 12-24 months behind the Abu Dhabi plant, he said, with California approving a utility to provide $30 million for the project this month.

It was also seeking funding of more than $100 million from the US Administration, which has earmarked $3.2 billion for CCS as part of its economic stimulus package, he said.

The global credit crunch is forcing many companies to delay or even cancel projects aimed at reducing carbon emissions, especially as European carbon emission prices have slumped by half in the past six months.

With the CCS technology not yet tested on a commercial scale and regarded as still far too expensive, Hydrogen Energy is biting a bullet by pushing ahead the full-sized projects, using pre-combustion technology.

Its projects compared with the world's first 30-MW demonstration project by Swedish utility Vattenfall AB in Germany, which has been running since September. The Schwarze Pumpe uses a different technology known as oxyfuel.

Many European companies are trying to develop post combustion technology, which can be retro-fitted to existing power plants. Some experts say this had a longer way to go.

'This is the most advanced CCS project in the world. This is many years ahead of anything else,' Gillies said, referring to its Abu Dhabi project, run with Abu Dhabi government-owned Masdar.

'Individual elements of the technology are all proven. So all we are doing is integrating them,' Gillies said.

The executive said unlike many projects in Europe, which are planned by utilities companies, it helped that its parent companies were resource companies with long experience in integrating complex technologies.

Referring to costs, he said: 'When you take into account the California and Washington contribution, the cost of the electricity will be competitive with all the other clean electricity sources in California.'

'If you compared that with another carbon abated technology,  like nuclear, you find it cheaper,' he said, noting that CCS had the added benefit of enhancing oil recovery because the carbon would be injected in ageing oil fields.-Reuters




Tags: abu dhabi | BP | Joint venture | Rio Tinto | Crisis | CCS plant |

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