Facts:

The governments of Japan and China have agreed on May 7th, 2008, to cooperate in carrying out a project to inject CO2 emitted from a thermal power plant in China into an oil field.

According to the project plan, from 1 to 3 million tons of CO2 will be captured annually from the Harbin Thermal Power Plant in Heilungkiang Province and potentially other plants elsewhere. It will then be transported by pipeline about 100 km to China’s largest oil field – the Daqing Oilfield, and injected and stored into the oilfield.

CCS alone will be unprofitable, but the two countries have determined that it makes financial sense if CCS is combined with an oil-exploitation (EOR) project. More than 40 million tons of oil is produced from the said oilfield annually. The project is expected to increase this figure by 1.5 to 2 million tons. It reportedly will also become possible to keep more than 150 million tons of CO2 into storage in the future.

Under the plan, more than one million tons of CO2 annually from will be transferred to the Daqing Oilfield, about 100 km from the plant, and will be injected and stored in the oilfield. The viscosity of crude oil there is thick but will be decreased by injecting CO2, making it easier to exploit the oil.

From Japan, the METI-affiliated Research Institute of Innovative Technology for the Earth (RITE) and other organizations plan to take part in the project, in addition to Toyota Motor Company and JGC Corp. From China, China National Petroleum Corporation and other organizations will participate. The two sides will begin negotiations on cost-sharing.

The project will cost 20 to 30 billion yen and is intended to start in 2009.

According to the Ministry of Economy, Trade, and Industry (METI), if realized, it will be the first case of injecting CO2 from a thermal power plant into an oil field.