Technical Assistance Consultant’s Report 
                              
                             Project Number: 52041-003 
                             August 2021 
                              
                              
                              
                             Integrated High Impact Innovation in Sustainable 
                             Energy Technology –    
                             Prefeasibility Analysis for Carbon Capture, Utilization 
                             and Storage (Subproject 2)  
                              
                              
                              
                              
                              Prepared by Denzel Hankinson 
                               
                              For ADB Energy Sector Group 
                                      
                               
                               
                              This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and 
                              the Government cannot be held liable for its contents.  
                              
            
            
            TA-9686 REG: Integrated High Impact Innovation in Sustainable Energy 
             Technology — Prefeasibility Analysis for Carbon Capture, Utilization 
                           and Storage (Subproject 2) 
            
            
            
            
                                     
                                     
                 CCUS Project Financing Considerations  
                         in Petroleum Refineries 
                                      
                               August 2021 
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                        Prepared by Denzel Hankinson 
                                     
                                     
                                     
                                     
                                      
                   
                  Table of Contents 
                  1      Executive Summary                                                 1 
                  2      Introduction                                                      7 
                  3      The Economics of Refineries and CCUS                              9 
                         3.1    The Economics of Refineries                                9 
                         3.2    The Economics of Carbon Capture Utilization                1 
                  4      The Refining Industry in Asia                                     6 
                         4.1    Major Players                                              7 
                         4.2    Status of CCUS in Select DMCs                              1 
                  5      Financing Structures and Sources                                  7 
                         5.1    Refining Project Structures                                7 
                         5.2    Equity Financing                                           8 
                         5.3    Debt Financing                                            10 
                  6      Identification of Potential Projects                             14 
                         6.1    ADB’s Role in Financing CCUS                              14 
                         6.2    Identifying Possible Investments and Interventions         9 
                  Appendices  
                  Appendix A – List of Interviewees and Webinars Attended                 17 
                  Appendix B : Country-Level Highlights                                   18 
                  Appendix C : Crack Spread Profitability Example                         35 
                  Appendix D : The Market Environment for CCUS                            36 
                  Appendix E : Examples of DFI Financing of Refineries                    47 
                  Appendix F : Carbon Capture and Utilization Technologies                50 
                  Appendix G : Examples of CO2 Use Projects                               54 
                  Appendix H : ADB Funds                                                  56 
                   
                   
                  Appendix Tables 
                  Appendix Table B.1: Indian Refinery Throughput Growth 2007-2018         20 
                  Appendix Table B.2: Indonesia: CO2 Emissions and Final Energy Demand 
                         Projections (2020-2050)                                          27 
                  Appendix Table B.3: Vietnam CO2 Emissions and Final Energy Demand 
                         Projections (2020-2050)                                          31 
                                                           
                   
                  Appendix Table B.4: Malaysia CO2 Emissions and Final Energy Demand 
                         Projections (2020-2050)                                           33 
                  Appendix Table D.1: Global Oil Demand by Region (mb/d)                   36 
                  Appendix Table D.2: Selected Petrochemical Cracker Additions Planned 
                         in Asia Pacific                                                   38 
                  Appendix Table D.3: Short- and Medium-Term Oil Price Forecasts           39 
                  Appendix Table D.4:: Long Term Oil Price Forecasts (USD per barrel)      40 
                  Appendix Table D.5: Annual CO2 Emissions (MtCO2)                         41 
                  Appendix Table D.6: UK CO2 Prices, Historical and Projected (2005-2040) 
                         USD/tonne of CO2 (2019 prices),                                   43 
                  Appendix  Table  F.1::  Non-Enhanced  Oil  Recovery  CO2  Utilization 
                         Technologies                                                      52 
                  Appendix Table F.2: CO2 Reutilization Pathways, Products, and Market 
                         Readiness Ratios                                                  53 
                   
                  Appendix Figures 
                  Appendix Figure B.1: Share per Company in Total Refining Capacity in 
                         India                                                             20 
                  Appendix Figure B.2: Share per Company in Total Refining Capacity in 
                         India                                                             21 
                  Appendix  Figure  B.3:  Indonesia:  Industry  final  energy  demand  by 
                         subsector and fuel, 2000-50                                       25 
                  Appendix Figure B.4: Vet Nam: Energy security indicators under the BAU, 
                         TGT and 2DC                                                       29 
                  Appendix Figure D.5: IEA and IMF Oil Price Forecasts                     37 
                  Appendix Figure D.6: Global Oil Demand and Emissions                     37 
                  Appendix  Figure  D.7:  CO2  Prices  in  Implemented  Carbon  Pricing 
                         Initiatives                                                       44 
                  Appendix Figure D.8: CO2 Reduction Scenarios for G20 Countries (2030)    45 
                   
                  Tables 
                  Table 1.1: Suggested Investment and Intervention Evaluation Criteria      4 
                  Table 3.1: Indicative Breakdown of Refinery Operating Costs              10 
                  Table 3.2: Select Global Refiners (ex-Asia), 2019                         1 
                  Table 3.3. Select Refiners in Asia, 2019                                  2