Four out of six companies awarded CO2 storage licenses offshore Norway

The Norwegian Ministry of Petroleum and Energy has awarded two new exploration licenses for CO2 storage on the Norwegian continental shelf in the North Sea to four companies.

The two exploration licenses are located in the southern part of the North Sea. The eastern license is offered to Aker BP and OMV Norge, while the northwest license is offered to Stella Maris CCS, a partnership of Wintershall Dea Norge and Altera Infrastructure Group.

“The establishment of commercial capture and storage of CO2 is important for the world to reach the goals of the Paris Agreement. The award of these two new licences contributes Norway to play an important role when it comes to establishing commercial, large-scale CO2 storage for European emission sources,” said Norway’s Minister of Petroleum and Energy Terje Aasland.

“The award is made to two application groups that have matured good plans for the storage of CO2. These projects will be able to help build up a new, commercial Norwegian marine industry.”

The licenses are offered with a binding work program, including one binding phase and subsequent conditional phases with decision points for the continuation or relinquishment. It will normally end with a demand that an investment decision on the realization of CO2 storage is made, and that a plan for development and operation (PUD) is submitted or the area is relinquished.

The ministry has reviewed applications from six companies following the announcement of suitable acreage in November 2022. Horizont Energi and Neptune Energy have not been awarded licenses in this round.

“The decision from the Ministry of Petroleum and Energy is disappointing for Horisont Energi. We still have great faith in carbon capture and storage (CCS) and this will continue to be an important part of our strategy going forward,” said Bjørgulf Haukelidsæter Eidesen, CEO of Horisont Energi. 

The license awarded to Aker BP and OMV will be named Poseidon. Aker BP holds a 60 per cent interest and will operate the license, while OMV Norge holds the remaining 40 per cent. The license comes with a work program that includes a 3D seismic acquisition and a drill or drop decision by 2025.

The Poseidon license could potentially provide storage of more than 5 million tons of CO2 per year. The intention is to inject CO2 captured from multiple identified industrial emitters in North-West Europe, including from Borealis’ industrial sites in Europe. 

Aker BP and OMV have entered into a collaboration agreement with Höegh LNG to provide the marine CO2 infrastructure required to collect, aggregate and transport the CO2 from emitters on the European continent to the NCS.

“We expect CCS to play a key role in the transition to a low-carbon energy future, and the NCS holds significant potential for carbon storage. As a leading operator on the NCS, Aker BP is well positioned to take an active role in this area,” said Karl Johnny Hersvik, CEO of Aker BP.

“This licence award provides us with an opportunity to explore both the technical and commercial potential of carbon storage. We look forward to collaborating with our partners to develop this into a sustainable and profitable business.”

Wintershall Dea and Altera’s Havstjerne CO2 storage license is located 135 kilometers southwest of Stavanger and will be operated by Wintershall Dea, holding 50 per cent of the shares.

The estimated annual storage capacity amounts to up to 7 million tonnes of CO2.

The partners plan to develop a system for transporting CO2 by ship to the license, offering storage to emitters from around Europe. The partnership has already investigated clusters of emitters in the Baltics, the Netherlands, Portugal, and Spain for sourcing CO2 for storage.

“This second licence award in Norway supports our ambitious target to build a global carbon management portfolio that potentially can abate 20 to 30 million tonnes of CO2 per year by 2040,” said Hugo Dijkgraaf, member of Wintershall Dea’s Board of Executive Directors and its Chief Technology Officer.

“We are proud of the trust that the Norwegian Ministry of Petroleum and Energy places in our expertise and our ability to contribute to reaching Europe’s climate goals.”

Wintershall Dea also operates the Luna license in the Norwegian North Sea for future storage of CO2 and is working with Equinor in the NOR-GE project on a 900-kilometer-long CO2 pipeline. In March, the company initiated the first CO2 storage in the Danish North Sea as part of Project Greensand.

These are the fifth and sixth acreages awarded for CO2 storage on the NCS. Namely, three have previously been awarded in the North Sea and one in the Barents Sea.

For a new licensing round, the Norwegian Ministry of Petroleum and Energy announced earlier this month that it had received applications from five companies seeking permits related to the injection and storage of CO2.