ABU DHABI – Targeted as an ambitious hub for science research, entrepreneurs, sustainable developments and clean energy, MASDAR has announced plans to go a step further with confirmed plans to capture its first carbon emissions from a steel plant in 2012. It is a project that will both reduce carbon emissions in the area and increase oil production.

In addition, the Abu Dhabi based institute will with officials to concretize a policy by the end of 2010 to work carbon capture storage (CCS), into the city’s power production model. Thereby attracting private investors and serving as a defacto role model.

In the words of Sam Nader, a Director with the institute, “MASDAR will be working as a think thank with different policy makers this year on proposals,” Nader said in an interview at the World Future Energy Summit.

“There should be economic incentives for power producers, and for that, there needs to be regulatory policy.”

As the firm driving Abu Dhabi’s clean energy drive and building its flagship carbon-neutral city, MASDAR has signed an agreement with the government of Alberta, Canada to share research on CCS initiatives. Under the project’s first phase--which will cost at least $2.5 billion--MASDAR will capture 5 million tons of carbon by the end of 2014.

The thinking is for MASDAR to sell carbon gas emitted from industrial plants--initially from three sites--to state-owned Abu Dhabi National Oil Co(ADNOC)., which would pump it into oil reservoirs to maintain pressure and increase oil production.

“We are working in close cooperation with them, technically and commercially,” Nader said. “Before we go into major EPC [engineering, procurement, and construction] on the plants, we have to finalize a contract based on carbon offtake.”

MASDAR, already runs a pilot carbon injection project with ADNOC at the Rumaitha oil field. One ton of carbon pumped into a reservoir could yield between 1.5 and 3.5 barrels of oil, according to estimates. MASDAR could also sell the carbon across the region once the emirate’s CCS network is in place. “Hopefully, in 20-years time, we create a market for itself,” Nader said.

OIL Masdar will build a 500-kilometer pipeline network across the emirate to pump the carbon gas into oil reservoirs. The pipeline’s design will be finalized by the second quarter of the year, with approval to award EPC contracts likely this year, Nader said. The new pipeline network, and equipping three existing plants to capture emissions, requires a capital expenditure of about $2.5 billion, Nader said. Masdar is talking to partners and will award the technology contracts in the first half of the year, he added.

Its first capture will be 800,000 tons of carbon from the state-owned Emirates Steel plant carbon by the end of 2012. Masdar will also capture carbon at two power stations in Taweelah, first from a plant operated by Taweelah Asia Power Co., and by the end of 2012 at an Emirates Aluminum plant.

Masdar will also capture 1.7 million tons of carbon from a fourth site, a planned $2 billion hydrogen plant it is building with British Petroleum in Shuweihat. “Retrofits are costly, so we’ll definitely focus on planned sites after this phase,” Nader said.

The project aims to capture more than 90% of a plant’s emissions, in a move that will help Abu Dhabi--one of the world’s highest per capita carbon emitters in the world--boost its green credentials. Abu Dhabi is the world's third-largest oil exporter.

“The fact that we have the oil industry here, and that oil companies are interested in boosting their production, only increases the strategic aspect of building a CCS network in Abu Dhabi,” Nader said. The Abu Dhabi government introduced its carbon capture plans two and a half years ago as part of a larger strategy to build a green industry and wean the economy off oil.

Abu Dhabi plans to almost quadruple its power generation capacity from six gigawatt to 23 gigawatt by 2020 to meet soaring demand. While some of that will be met by planned nuclear power plants and renewable energies, “the rest has to come from fuel,” Nader said.