Carbon Capture and Utilization Projects Run by Oil and Gas Companies: A Case Study from Russia

As oil and gas companies are one of the major greenhouse gas emitters, they face increasing responsibility to address climate challenges. This highlights the necessity of integrating decarbonization options into their operations to meet global climate objectives. While progress in technologies for capturing, utilizing, and storing CO2 (CCUS technologies) is often attributed to oil and gas companies, CCUS projects in the sector predominantly focus on carbon storage, namely CO2 injection for enhanced oil recovery, which presents limited possibilities. Meanwhile, carbon capture and utilization (CCU) technologies offer a promising avenue for producing valuable products from CO2, a potential that has been underexplored in theory and practice within the oil and gas sector. This study analyzes the development of the full CCU cycle by oil and gas companies, assessing the economic viability of such projects. It includes a content analysis of research materials on CCU deployment and a case study modeling the economic viability of producing methanol from CO2 in Russia. The findings indicate that the estimated minimum price for CO2-based methanol to achieve project payback is USD 1128 per ton, compared to approximately USD 400 per ton for traditional methanol. This price gap underscores the need to foster the development of low-carbon technologies, markets, and measures to support these projects. In the domain of CCU projects, cost-reduction measures could be more applicable, while regulatory measures, such as carbon taxes, currently have a limited impact on the economic viability of these projects.