A carbon capture chain is a set of interfaces. An emitter captures and compresses, a transporter moves the stream, a storage operator injects and monitors, and in many projects a separate entity claims an incentive or credit against the result. Each interface is a contract, and each contract has to answer the same awkward question: what happens when the stream or the service is not what the next party expected.
That question is harder here than in conventional hydrocarbon offtake because the product has no independent market value to fall back on. If a buyer refuses an off-specification cargo of crude, the seller sells it elsewhere at a discount. If a storage operator refuses an off-specification CO2 stream, the emitter has nowhere to put it and may have to curtail production or vent. The remedy structure has to reflect that.
This guide covers the five areas a CO2 offtake or transport and storage agreement has to settle, and more specifically the recurring duties each one creates after signature. The negotiation gets professional attention; the administration generally does not, which is where chains built on good contracts still underperform.
Five areas the agreement has to settle
These are the terms that determine how the chain behaves under stress. Each one also generates ongoing work, which is the part most often left to be figured out during commissioning.
- Composition specification, numeric impurity limits measured at a named point, with graduated consequences for an off-specification delivery rather than a single blunt remedy.
- Delivery and interruption, nomination and delivery commitments, planned and unplanned interruption allowances on both sides, notice periods and the consequences of exceeding them.
- Measurement, reporting and verification, metering arrangements, measurement standard and uncertainty, reporting frequency and format, record retention and the dispute procedure.
- Liability for leakage and monitoring, allocation of responsibility during injection and after it ceases, including monitoring scope, duration, cost and the assumed transfer position.
- Incentive and credit support, the data each party owes the party claiming a benefit, with deadlines derived from the programme’s filing dates rather than from convenience.
A chain where all five are addressed in compatible terms across every link behaves predictably. A chain where the emitter’s agreement and the storage agreement define specification at different points, or allow different interruption volumes, has a gap that someone will fall into during the first cold winter.
Specification measured at the capture plant outlet and specification measured at the injection wellhead are different commitments, and a stream can satisfy one while failing the other. The same applies to interruption allowances, measurement standards and reporting deadlines. Reading each agreement in isolation passes; reading the chain end to end is what finds the mismatch, and that review belongs with contract administration rather than with each negotiating team.
The duties that run after signature
Carbon capture agreements are long and the duties they create are continuous. These are the ones that need owners, dates and evidence from the first day of operations.
- Specification monitoring and exception handling. Measured composition against contractual limits, with a defined route when a parameter drifts, recorded as an exception rather than handled informally between operators
- Interruption notices and allowance tracking. Planned and unplanned interruptions logged against annual allowances, so both parties know where they stand before a dispute about entitlement arises
- Periodic measurement reporting. Volumes and composition reported at the contractual frequency, in the contractual format, with records retained to the agreed period and standard
- Monitoring obligations after injection. Post-injection monitoring scope, frequency and reporting held as long-dated obligations with cost allocation, since these outlast most individuals involved
- Credit and incentive data provision. Data owed to the claiming party, with deadlines set back from programme filing dates and evidence of transmission retained against the clause
A five-step roadmap for administering a capture chain
Step 1, map the chain and its interfaces
Draw every contractual link from emitter to storage, including transport, any intermediate compression or hub arrangement, and the entity claiming incentives. Record which agreement governs each interface. Projects with a hub or shared pipeline frequently have more interfaces than the commercial team describes.
Step 2, compare the specification terms across links
Line up impurity limits, measurement points and tolerances from each agreement side by side. Mismatches are common, usually unintentional, and far cheaper to resolve before operations than after the first off-specification event.
Step 3, reconcile interruption allowances
Do the same for planned and unplanned interruption rights and notice periods. The question to answer is what happens when the storage site exercises its full maintenance allowance in a period when the emitter has no flexibility, and whether any agreement addresses the outcome.
Step 4, build the obligation set per agreement
Load specification monitoring, interruption logging, measurement reporting, post-injection monitoring and credit data provision as obligations with role owners and required evidence. Date the long-dated monitoring duties properly, because they will outlast the project team.
Step 5, set the review cadence on liability assumptions
The regimes governing long-term storage liability are still developing in most jurisdictions. Review the assumed position annually against current law, and record the review, because a change in the regime affects the economics of agreements signed years earlier.
Hold chain commitments in one register
Aavenir tracks specification limits, interruption allowances, measurement reporting and post-injection monitoring as obligations across every link in the chain.
Why administration matters more here than in conventional offtake
Three features make this different. The duties are long-dated, running well past the injection period and therefore past the careers of the people who negotiated them. The chain has no spot market, so a failure at one interface propagates immediately to the others rather than being absorbed commercially. And the incentive layer imposes evidentiary requirements on parties that do not themselves claim the benefit, which means obligations flow in directions commercial teams do not instinctively expect. All three argue for holding the commitments in a register with role owners rather than in project documentation, which is the same conclusion operators reached for decommissioning and abandonment obligations.
Interface, term to settle and recurring duty
The table walks the chain and sets out what each interface has to settle and the duty it generates afterwards. Use it as a checklist when reading a set of agreements as a chain rather than individually.
| Interface | Term to settle | Recurring duty | Evidence |
|---|---|---|---|
| Capture to transport | Specification at outlet, off-spec remedy | Composition monitoring and exceptions | Measurement records and exception log |
| Transport to storage | Specification at inlet, pressure and rate | Interruption logging against allowance | Notices with dates and volumes |
| Storage injection | Measurement standard and reporting | Periodic volume and composition reports | Reports with transmission record |
| Post-injection | Monitoring scope, duration, cost | Long-dated monitoring and reporting | Monitoring reports per cycle |
| Credit claim | Data each party owes | Data provision before filing dates | Data package and receipt |
Carbon capture projects are negotiated carefully and administered loosely, which is the normal pattern for new asset classes. The difference here is that the duties outlast everything else about the project, and the chain has no commercial shock absorber when an interface fails. Reading the agreements as a chain, resolving the specification and interruption mismatches before operations, and loading the long-dated monitoring duties into a register with role owners is unglamorous work that removes most of the predictable failure modes. It also produces the evidence the incentive regimes will ask for, which is a return on the effort regardless of what else goes right.
For related guidance, see The operator’s guide to oilfield master service agreements, Contractor prequalification and MSA control for operators and LNG destination clauses and the diversion question.
