W.O.

VBSA to Saipem Sept 2020

CUSTOMER: VBSA
JOB: 023115

LOCATION: SWITZERLAND Doc. no. 000-ZA-E-09100

PROJECT: CAPEX and OPEX - ESTIMATE REPORT Rev. 1 Page 1 of 16

CAPEX and OPEX - ESTIMATE REPORT

1 05/03/2021 Final Issue M.Balsamini R.Corradi G.Catini

0 18/12/2020 Final Issue M.Balsamini R.Corradi G.Catini

A 07/12/2020 Issue for review M.Balsamini R.Corradi G.Catini

Rev. Date Description Prepared Checked Approved

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LOCATION: SWITZERLAND Doc. no. 000-ZA-E-09100

PROJECT: CAPEX and OPEX - ESTIMATE REPORT Rev. 1 Page 2 of 16

TABLE OF CONTENTS

1. INTRODUCTION 3

1.1 FOREWORD 3
1.2 SCOPE 4
1.3 DEFINITIONS 5
1.4 ABBREVIATIONS 5

2. COST ESTIMATIONS 6

2.1.1 CAPEX 6
2.1.2 OPEX - Operating & Maintenance Costs 6
2.1.3 ACCURACY 6

3. BASIC DATA 7

3.1 HOME OFFICE SERVICES 7

3.2 MATERIALI SUPPLY ESTIMATION COST 7
3.2.1 Pipeline Materials Costs 7
3.2.2 Compression Station Materials Costs 7
3.2.3 Compression Stations at Delivery Points Material Costs 8
3.3 CONSTRUCTION AND INSTALLATION ESTIMATION COST 9
3.3.1 Pipeline Construction Costs 9
3.3.2 Compressor Station Construction Costs 9
3.4 COMMISSIONING 9
3.5 GENEVA LAKE (OFFSHORE) PIPELINE COSTS 10

4. OTHER TRANSPORT SYSTEM COMPONENTS 11

4.1 METERING AND PIGGING STATIONS 11

4.2 TECHINCAL ALLOWANCE 11
4.3 ESCALATION 11
4.4 EXCLUSION 11
4.5 CAPEX AND OPEX BREAKDOWN STRUCTURES 12
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1. INTRODUCTION

1.1 FOREWORD

In the context of negative emissions and decarbonizing industry, carbon capture and storage (CCS) is being
discussed as an option for Switzerland. The search for domestic storage sites is ongoing, in the meantime, there
could be a possibility of collecting Swiss CO2 and sending it to storage sites under the North Sea, that are planned
to open by end of 2024 (Northern Lights project by Equinor, Shell, Total).

In Switzerland, KVA Linth is currently performing a feasibility study for a capture plant with a potential provider,
other emitters are also exploring cost and feasibility.

Saipem has been awarded for the feasibility and cost estimate of building a “collection network” (similar to a
distribution grid for gas) to connect to Switzerland’s largest CO2 emitters on the one hand and to transmission
pipelines on the other hand by 2030.

Switzerland has currently 32 large emitters, defined as point sources that emit over 100,000 tons/y of CO2 (see
Figure 1.1.1). Together, these 32 large emitters emit about 7 million tons of CO2 per year.

Figure 1.1.1: Large emitters and current natural gas pipeline network in Switzerland

Currently, none of these plants has a capture facility – it is expected that the current study should provide an
indication of optimal conditioning parameters (water content and purity) for the CO2.

The CO2 collecting network subject of the present study will transport the captured CO2 stream up to a delivery
point, from where a long transmission pipeline will deliver the CO2 to a selected location, for final sequestration.
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Two options are possible:

• Transmission towards the North could start in Basel

• Transmission towards South should be assumed to be in Collombey, where an existing oil pipeline
leads to Genoa

The transmission pipeline is not part of the current SoW.

It is requested that the new pipeline network to follow the existing natural gas pipelines corridors as much as
possible. A specific effort shall be made to clarify possible configurations for the Kanton of Zurich, where different
scenarios are possible to connect additional smaller point sources.

1.2 SCOPE

The purpose of the present document is to describe the methodology used for the Estimate for all solution studied
in the Pipeline System Hydraulic & Optimization Study Report Doc. No. 000-ZA-E-09001 Rev.A, which are:

Gaseous Phase Transport - Base Case

Gaseous phase transport is with a maximum operating pressure of 35 barg. This is the maximum pressure level
ensuring no liquid formation associated to phase change in the pipeline thus allowing single phase stable transport
(i.e. purely gas). This solution has the advantage to keep quite low pressures in the system, however large
diameters could be required in case of high flowrates. Due to safety reasons, some flowlines crossing urban areas
are considered with a MOP = 10 barg (i.e. low pressure flowlines).

Gaseous Phase Transport - Low Pressure Flowlines MOP = 5 barg

This configuration is as per base case above, with the difference that the maximum operating pressure for the low
pressure flowlines is 5 barg instead of 10 barg.

Gaseous (No LP flowlines)

This configuration is as per base case above, but considers the possibility to install high pressure flowlines (i.e.
MOP = 35 barg) also in urban areas.

Dense Phase Transport.

Dense phase transport is with as maximum operating pressure of 145 barg. Dense phase transport for CO2 is
particularly efficient, as the CO2 in dense phase conditions shows the density of a liquid and the viscosity similar
to a gas, however this solution involves higher compression requirements. A maximum design pressure of 150
barg is considered being the limit for rating #900: higher operating pressures are technically feasible, however
they will have higher compression cost and probably permission issues. In order to keep the CO2 in dense phase,
a minimum pressure of 85 barg is to be maintained along the lines
Gaseous phase transport is foreseen in low pressure flowlines (MOP=10 barg) and in some pipeline sections where
dense phase transport is deemed not feasible due to safety reasons (in these sections the MOP is fixed to 35 barg).
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1.3 DEFINITIONS

The abbreviations when used in this document will have the meanings described here in the following list:

COMPANY/OWNER VBSA
CONTRACTOR Saipem S.p.A.
PROJECT CO2 COLLECTION NETWORK CONCEPTUAL STUDY

1.4 ABBREVIATIONS

API American Petroleum Institute

ATCI Actualized Transport Cost Index
CAPEX Capital Investment Cost
CCS Carbon Capture and Storage
CS Compression Station
DF Design Factor
DP Design Pressure
d/s Downstream
HDPE High Density Polyethylene
ESDV Emergency Shut Down Valve
HP High Pressure
KM Kilometre
KP Kilometre Post
LP Low Pressure
MOP Maximum Operating Pressure
MOT Maximum Operating Temperature
MM Million
NPS Nominal Pipe Size
OD Outside Diameter
OPEX Operating Cost
PE Polyethylene
SCADA Supervisory Control and Data Acquisition
SMYS Specified Minimum Yield Strength
WT Wall Thickness
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2. COST ESTIMATIONS

The estimates are based on budgetary costs available at present in Saipem databases from similar project in Oil
and Gas field of application executed in Europe zone as well as from available publications.

No formal inquires to vendors and subcontractors have been required for material supply cost, transport and
construction.

2.1.1 CAPEX

The Facilities Costs represent the EPC Contractor’s Budget Price required to execute the Engineering, Procurement
and Supply, Construction, Pre-commissioning and Commissioning operations for the Project.

Land Fee and Transit costs have been added in a separate section as intended to be manage by COMPANY as
owner cost.

2.1.2 OPEX - Operating & Maintenance Costs

Operating and maintenance costs have been estimated according to the following assumptions:

• Pipeline Maintenance: 1.50% of total Pipeline CAPEX

• CS Operation & Maintenance: 4.00% of total CS CAPEX
• Energy Cost: 100 €/MWh (a compressor station utilization factor of 90% is assumed)

2.1.3 ACCURACY

The Cost Estimation has the accuracy of the Estimate is a Class 5, in accordance with table here below, and the
level of maturity of technical and design information.
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LOCATION: SWITZERLAND Doc. no. 000-ZA-E-09100

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3. BASIC DATA

3.1 HOME OFFICE SERVICES

Home Office Services cost including Project Management, basic and detail Engineering, Procurement activities,
subcontracts engineering studies can be considered.

• Pipeline Engineering: 4 % of total Pipeline Section

• Station Engineering: 9 % of total Station Section

3.2 MATERIALI SUPPLY ESTIMATION COST

3.2.1 Pipeline Materials Costs

• Line Pipes (material only): 1.8€/kg (ISO3183 L450MB - API5L X65 steel grade is considered, no
significant savings are expected if using lower steel grades, typically used in low pressure gas lines)
• Internal Lining: N/A
• External Coating: 23 €/m2 (3mm PE)
• Cathodic Protection: 2.4 €/m
• Valves, Scraper Traps, etc.: 6% of line pipe material
• SCADA/Telecommunication: 21 €/m

3.2.2 Compression Station Materials Costs

Material of Compression Station has been estimated starting from internal database for similar project for Oil &
Gas.

In the below table 1, the cost of 1 compression unit is reported for the 4 possible compression configurations and
for different classes, each one corresponding to a different maximum flowrate.
The installed power of each compression unit is reported in Table 2.
Table 1: Compressor Unit Cost
Max Compression from 0 Compression from 0 Compression from 10 to Compression from 0 to
rate to 20 bar (gas phase) to 40 bar (gas phase) 140 bar (dense phase) 140 bar (dense phase)
ktons/y MM€ MM€ MM€ MM€
Class 1 200 2.1 3.1 2.6 4.1
Class 2 300 2.4 3.6 3.0 4.8
Class 3 400 2.7 4.0 3.4 5.4
Class 4 500 3.0 4.5 3.8 6.1
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Table 2: Compressor Unit Installed Power

Max Compression from 0 Compression from 0 Compression from 10 to Compression from 0 to
rate to 20 bar (gas phase) to 40 bar (gas phase) 140 bar (dense phase) 140 bar (dense phase)
ktons/y MW MW MW MW
Class 1 200 1.4 2.1 1.5 2.7
Class 2 300 2.4 3.5 2.5 4.6
Class 3 400 3.3 4.9 3.5 6.4
Class 4 500 4.2 6.4 4.5 8.2

Here below the remaining compression station supply costs are listed:

• Dehydration Unit: 0.4 million €

• Appurtenances (piping, utilities, instrumentation, etc.) 150% of compressor unit (gas phase)
200% of compressor unit (dense
phase)

• Rotating parts: 30% of Gas Compressor Trains

(15 years expected lifetime)

• Electric Sub-station cost: 1.5 million € (1+0 spare philosophy)

5 million € (2+1 spare philosophy)

3.2.3 Compression Stations at Delivery Points Material Costs

In the below Table 3, the cost of 1 compression unit is reported for the export stations at Basel and Collombey,
with compression from gas or dense phase. In all cases a spare philosophy of 3+1 is considered. No dehydration
unit is foreseen at the export stations, since the CO2 coming from the gathering network is already dehydrated.

Table 3: Compressor Unit Installed Power

Compressor Compressor Unit Compressor Unit
Unit Max Rate Power Cost
ktons/y MW MM€
Basel Export CS from gas phase
2510 24.8 11.7
(10 to 145 bar)
Collombey Export CS from gas phase
1800 17.8 9.0
(10 to 145 bar)
Basel Export CS from dense phase
2510 1.25 1.6
(100 to 145 bar)
Collombey Export CS from dense phase
1800 1.25 1.6
(100 to 145 bar)
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The following investment costs are considered in case of compression from gas phase (10 to 145 bar):

• Appurtenances (piping, utilities, instrumentation, etc.) 50 MM€ in Collombey CS

60 MM€ in Basel CS
• Rotating parts: 30% of Gas Compressor Trains
(15 years expected lifetime)
• Electric Sub-station cost: 28 MM€

The following investment costs are considered in case of compression from dense phase (100 to 145 bar):

• Appurtenances (piping, utilities, instrumentation, etc.) 200% of compressor unit

• Rotating parts: 30% of Gas Compressor Trains
(15 years expected lifetime)
• Electric Sub-station cost: 5 MM€

3.3 CONSTRUCTION AND INSTALLATION ESTIMATION COST

3.3.1 Pipeline Construction Costs

Pipeline Laying and Assembling cost: 55 €/inch/m in hilly terrain (most of the system)
90 €/inch/m in mountain/challenging areas (Lonza and Giubiasco
flowlines)

The above Costs should be intended as inclusive of Installation of Cathodic Protection, Block Valve Station , Scraper
Traps, SCADA, and telecommunication system.

Pipeline Construction Cost should be intended as inclusive of SITE MANAGEMENT and SUPERVISION (QA, HSE ect.)

3.3.2 Compressor Station Construction Costs

In accordance with the level of accuracy of estimation and in line with our experience and our cost database,
construction cost of Compressor Station has been estimated as:

• 35% of Construction plus Material Supply for compressor stations of the gathering network;
• 100% of Construction plus Material Supply for the compressor stations at delivery points.

Construction Cost should be intended as inclusive of SITE MANAGEMENT and SUPERVISION (QA, HSE ect.)

3.4 COMMISSIONING

Commissioning works have been estimated in accordance with the following percentage:
• Pipeline Commissioning: 0.5 % of total Pipeline material + construction cost
• Station Commissioning: 1.5 % of Station material + construction cost
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3.5 GENEVA LAKE (OFFSHORE) PIPELINE COSTS

Parameters used for a budgetary cost estimate of the Geneva Lake offshore section are reported here below.

• Line Pipes (material only): 1.8€/kg

• Buckle Arrestors: 10% of line pipe cost
• External Coating: 26 €/m2
• Anodes Cost: 6300 €/ton (1% of line pipe material)
• Concrete Cost: 735 €/ton (concrete thickness = 6 cm - assumed)
• Installation time (S-lay rate): 7.5 km/day + 4 days for startup + 7 days for pull-in
• Laying cost: 500,000 €/day
• Engineering + Survey Cost: 5 million €
• Precomm. + Testing Cost: 5 million €
• Intervention Cost: 10% of Total Cost
• Mob/Demob Cost: 37.5 million €
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4. OTHER TRANSPORT SYSTEM COMPONENTS

4.1 METERING AND PIGGING STATIONS

Metering stations can be installed at compression facilities, including filters and metering lines, in a suitable
arrangement to measure the flow as per actual state of-the-art.

Please note that these system components are not included in the present CAPEX/OPEX Estimation

4.2 TECHINCAL ALLOWANCE

The Estimate is inclusive of the technical allowance to cover all technical uncertainties related to material supply
and construction.
• ALLOWANCEs: 15 % of total investment cost

4.3 ESCALATION

The present Capex has been developed on today’s cost, based on current cost data and the escalation not
included.

4.4 EXCLUSION

The present cost estimate does not include, due to unavailable information at this stage of the project, the
following costs:

• Financing Costs;
• Custom Duties, Taxes and VAT;
• Any other OWNER Cost except Land Fee and Transit costs;
• Currency Risks;
• Escalation/market conditions;
• Any costs associated to specific Company’s terms and conditions;
• All Weather stand-by cost for Offshore Pipeline Section.
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4.5 CAPEX AND OPEX BREAKDOWN STRUCTURES

The calculations for CAPEX and OPEX costs are reported here below for the four different scenarios listed in
Appendix 1.2 Scope of these present documentation.

Gaseous Phase Transport - Base Case

Gaseous - Base case Pipeline (MM€) Compressor Stations (MM€)

Engineering 52.2 71.8

East 21.4 44.7
West 30.9 27.1
Material Supply 242.9 466.5
Pipeline -
Pipeline East 103.4 -
Pipeline West 139.5 -
CS
CS East 290.3
CS West 176.2
Construction
1,159.8 261.9
Comm & Supervision
East 430.6 156.3
West * 722.7 94.9

Commissioning East 2.7 6.7

Commissioning West 3.9 4.1
Cost 1,454.9 800.2
Fee and Transit 62.7 -
Allowances 251.9 141.2

Total Cost (CAPEX) 1,769.5 941.4

* Offshore Section(30", 16 KM) included

Total OPERATING COST 26.5 111.3

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Gaseous Phase Transport - Low Pressure Flowlines MOP = 5 barg

Gaseous - LP flowlines
Pipeline (MM€) Compressor Stations (MM€)
MOP=5bar

Engineering 52.9 71.8

East 21.7 44.7
West 31.2 27.1
Material Supply 245.3 466.5
Pipeline -
Pipeline East 104.8 -
Pipeline West 140.6 -
CS
CS East 290.3
CS West 176.2
Construction
1,173.7 261.9
Comm & Supervision
East 436.9 156.3
West * 730.3 94.9

Commissioning East 2.7 6.7

Commissioning West 3.9 4.1
Cost 1,471.9 800.2
Fee and Transit 63.5 -
Allowances 255.0 141.2

Total Cost (CAPEX) 1,790.4 941.4

* Offshore Section(30", 16 KM) included

Total OPERATING COST 26.9 115.0

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Gaseous (No LP flowlines)

Gaseous No LP flowlines Pipeline (MM€) Compressor Stations (MM€)

Engineering 51.9 58.2

East 21.1 34.8
West 30.7 23.4
Material Supply 241.5 378.2
Pipeline -
Pipeline East 102.5 -
Pipeline West 139.1 -
CS
CS East 226.0
CS West 152.2
Construction
1,152.4 212.4
Comm & Supervision
East 425.9 121.7
West * 720.0 82.0

Commissioning East 2.6 5.2

Commissioning West 3.8 3.5
Cost 1,445.8 648.8
Fee and Transit 62.3 -
Allowances 250.2 114.5

Total Cost (CAPEX) 1,758.3 763.2

* Offshore Section(30", 16 KM) included

Total OPERATING COST 26.4 95.6

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Dense Phase Transport.

Dense Phase Transport Pipeline (MM€) Compressor Stations (MM€)

Engineering 36.0 111.4

East 13.6 65.4
West 22.4 46.0
Material Supply 196.9 724.3
Pipeline -
Pipeline East 75.5 -
Pipeline West 121.4 -
CS
CS East 425.2
CS West 299.2
Construction
781.0 406.7
Comm & Supervision
East 264.1 228.9
West * 512.4 161.1

Commissioning East 1.7 9.8

Commissioning West 2.8 6.9
Cost 1,014.0 1,242.5
Fee and Transit 43.2 -
Allowances 173.7 219.3

Total Cost (CAPEX) 1,230.9 1,461.7

* Offshore Section(16", 16 KM) included

Total OPERATING COST 18.5 174.9

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Export CS at Delivery Points

Compressor Compressor
Export CS at Delivery Points Export CS at Delivery Points
Stations Stations
from Gas Phase from Dense Phase
(MM€) (MM€)
Engineering 33.2 Engineering 6.2
Basel CS 18.2 Basel CS 3.1
Collombey CS 15.0 Collombey CS 3.1
Material Supply 248.8 Material Supply 48.7
Basel CS 134.8 Basel CS 24.4
Collombey CS 114.0 Collombey CS 24.4
Construction Construction
87.8 13.8
Comm & Supervision Comm & Supervision
Basel CS 46.8 Basel CS 6.5
Collombey CS 36.0 Collombey CS 6.5

Commissioning Basel CS 2.7 Commissioning Basel CS 0.5

Commissioning Collombey CS 2.3 Commissioning Collombey CS 0.5
Cost 369.7 Cost 68.7
Allowances 65.2 Allowances 12.1
Total Cost (CAPEX) 435.0 Total Cost (CAPEX) 80.8

Total OPERATING COST 59.2 Total OPERATING COST 5.2