‘Herculean effort’ needed to unleash CCUS at scale, but repurposing North Sea oil & gas infrastructure offers a boon for Europe

Aberdeen-headquartered energy consultancy Xodus has unveiled a new whitepaper, which was produced in partnership with Subsea7 and designed as a tool for assessing the relative cost efficiency of carbon capture, utilization, and storage (CCUS) projects and the timeline for their viability. This report finds that around 100 North Sea storage sites will be needed to meet the 2050 CCUS demand along with more than 7,500 kilometers of new pipelines and dozens of onshore emissions-capturing and gathering sites.

According to Xodus, Europe is “the only leading economic region that has its largest hydrocarbon basin at the heart of its economy,” as about 40% of European industrial emissions are generated within 500 km of the North Sea. The UK player sees this as “a strategic advantage” in reducing the cost of developing CCUS projects, especially since the volume of CO2 being injected into the North Sea by 2050 is expected to be equivalent to the natural gas currently being extracted from the basin.

Steve Swindell, CEO of Xodus, commented: “If we’re to get to net zero in an orderly and timely manner, pioneering technologies like CCUS are a necessity, not an option. Fortunately, the North Sea’s world-class oil and gas industry provides the perfect foundation for the rollout of carbon capture, with the potential to repurpose and build around existing infrastructure. But the outlook for this crucial technology is somewhat vague with many question marks around timing, volume and prime locations for locking away emissions.

“Our study analyses many of these uncertainties by examining the infrastructure needed to enable deployment at scale. We have developed this tool to generate scenario-based forecasts of how Europe’s CCUS sector will mature up to 2050, a major asset in helping developers to make educated and accurate investment decisions.”

In the whitepaper, entitled ‘Forecasting the North Sea CCUS infrastructure to 2050,’ Xodus assessed 560 potential storage sites, existing North Sea gas pipelines, and potential new infrastructure to rank the cost efficiency of different CCUS initiatives to support CCUS operators and stakeholders in making better-informed investment decisions.

The report forecasts that up to 100% of European CCUS projects will be anchored in the North Sea in the coming decade, with the share reducing over time. As a result, the North Sea would retain a 60% market share of a 500 megatonnes per annum (MTPA) market by 2050, based on the high-case estimates for emissions reduction.

While confirming that emissions will be imported by vessels and long-distance pipelines, Xodus explains that the extent to which this will be done depends on various factors, including transportation costs, competing storage sites, and societal attitudes towards onshore storage. By the end of the decade, the UK firm expects eight operational CCUS projects in Europe, including Northern Lights in Norway, and the Viking and Acorn clusters in the UK.

James McAreavey, Head of CCUS at Xodus, remarked: “It will require a Herculean effort to deliver CCUS projects at the scale Europe needs, but the enormous benefits of doing so are obvious. There is the chance to make the most of existing synergies with the offshore oil and gas industry and reuse miles of existing pipelines that may otherwise need to be removed from the North Sea.

“As the transition progresses, it is inevitable that CCUS projects will be competing for seabed area with other low carbon technologies, but that could drive collaboration between industries and lead to the creation of a basin-wide integrated energy system.”

Furthermore, the report indicates that all carbon stores will be situated near or linked to high-emitting regions, offering a decarbonization solution for vast swathes of heavy industry, thus, developments will likely be supported by direct government subsidies, alongside contracts tied to the ETS and UKTS emissions schemes.

In addition, Xodus finds that between 50% and 70% of North Sea CO2 storage could re-use infrastructure with the right approach, delivering “significant” cost savings and environmental benefits. However, this hinges on a strategic national and cross-border infrastructure build-out strategy to ensure key infrastructure is kept in place.

Recently, Offshore Energies UK (OEUK) disclosed that more than 1,000 North Sea wells would be sealed between 2023 and 2027, with 100,000 tons of surface and seabed structures removed in 2026 alone. At the same time, around 200 new large-scale wind turbines are scheduled to be installed, representing “a considerable infrastructure and workforce challenge,” highlighted OEUK.

Additionally, a total of 180 oil and gas fields out of 283 currently active in the North Sea are slated to cease production by 2030.