Spotlight on major projects in carbon capture realm

Carbon capture utilization and storage or CCUS has gained momentum as a topic of global interest in the last couple of years as energy transition talks and plans intensified, especially in the offshore energy and maritime industries.

Carbon capture is a process where the greenhouse gas carbon dioxide (CO2), the key contributor to global warming, is captured in the power generation and industrial processes, preventing its release into the atmosphere.

In addition to reducing overall carbon emissions, capturing these emissions at their source and storing them underground is one of the key elements of energy transition and is critical to achieving net-zero target by 2050.

The pipeline of CCUS projects has been growing lately driven by global climate targets of the Paris Agreement as well as increased interest from policy makers, investors, and industry players looking at ways to mitigate the effects of climate change that go beyond renewable energy.

According to the International Energy Agency (IEA), after years of declining investment, plans for more than 30 new integrated CCUS facilities have been announced since 2017 with the vast majority being in the United States and Europe, but projects are also planned in Australia, China, Korea, the Middle East, and New Zealand.

The IEA also pointed out that almost one-third of planned CCUS projects involve the development of industrial CCUS hubs with shared CO2 transport and storage infrastructure.

The energy agency believes that reaching net-zero will be virtually impossible without CCUS as the technology contributes both to reducing emissions in key sectors directly and to removing CO2 to balance emissions that are challenging to avoid.

CCUS is also expected to play a role in the decarbonization of the oil and gas production with major oil and gas players like BP, Shell, Total, Equinor, Eni, and others participating in the development of these projects.

The IEA stated that more than 20 per cent of global oil and gas production is covered by 2050 net-zero commitments, with CCUS expected to play a role in every case.

While the portfolio of CCUS projects is becoming increasingly diverse, we will be highlighting several major projects currently under development, which are located in the UK as well as in Norway and the Netherlands. Some of them are also linked to low-carbon hydrogen production.

There are two elements to the Acorn project in the UK, the carbon capture and the hydrogen element. Acorn Carbon Capture and Storage (CCS) and Acorn Hydrogen are both part of developments planned at the St. Fergus gas terminal near Peterhead, Aberdeenshire.

Acorn CCS is designed to take advantage of existing offshore oil and gas infrastructure and a well understood offshore CO2 storage site in the North Sea. The project holds the first UK CO2 appraisal and storage licence awarded by the Oil and Gas Authority in late 2018 and is looking to establish CO2 mitigation infrastructure essential for meeting the Scottish and UK Government Net-Zero targets.

Through the Acorn Hydrogen project, the North Sea natural gas will be reformed into clean hydrogen, with CO2 emissions safely mitigated through the Acorn CCS infrastructure. This hydrogen will then be used in transport applications and in the gas grid to decarbonise heating in homes and industries.

When it comes to recent developments related to the project, Japan’s Mitsui in March 2021 invested in Storegga, which was at the time the lead developer of Acorn. Mitsui said it would help Storegga accelerate its vision and commitment by using its extensive knowledge of upstream oil and gas industries and strong global networks.

Later that same month, Acorn CCS and Hydrogen project received £31 million in funding from the UK government. The funds were allocated to Scotland’s Net-Zero Infrastructure project — led by Storegga’s subsidiary Pale Blue Dot and which comprises the Acorn CCS project — to fund offshore and onshore engineering studies connecting industrial sites across east Scotland with access to carbon storage.

While the Acorn project was initially led by Storegga and Pale Blue Dot, Storegga, Shell, and Harbour Energy in April 2021 became equal partners in the CCS project. The partners will develop the project through to final investment decision (FID), construction, operation, and beyond.

Using CO2 from the St. Fergus gas terminal, from Scotland’s carbon-intensive industries and imported CO2 from the rest of the UK and Europe into Peterhead Port, Acorn is expected to store at least 5Mt/year of CO2 by 2030, half the CO2 emissions set out in the UK Government’s ‘Ten Point Plan’ for a ‘Green Industrial Revolution’ by 2030. The project is expected to be operational by the middle of the decade.

As both CCS and hydrogen are expected to play a key role in helping the industry reach net-zero targets, Norway’s Equinor has engaged in a project to develop one of the UK’s – and the world’s – first at-scale facilities to produce hydrogen from natural gas in combination with carbon capture and storage.

The project is called Hydrogen to Humber Saltend (H2H Saltend) and it is Zero Carbon Humber’s anchor project. It provides the beginnings of a decarbonised industrial cluster in the Humber region, the UK’s largest by emissions.

This project will be located at px Group’s Saltend Chemicals Park near the city of Hull and its initial phase comprises a 600-megawatt auto thermal reformer with carbon capture, the largest plant of its kind in the world, to convert natural gas to hydrogen.

This will enable a large-scale hydrogen network, open to both blue hydrogen (produced from natural gas with CCS) and green hydrogen (produced from electrolysis of water using renewable power), as well as a network for transporting and storing captured CO2 emissions.

It will enable industrial customers in the Park to fully switch over to hydrogen and the power plant in the Park to move to a 30 per cent hydrogen to natural gas blend. As a result, emissions from Saltend Chemicals Park will reduce by nearly 900,000 tonnes of CO2 per year.

Equinor and its partners will mature the project towards a final investment decision during 2023 with potential first production by 2026.

Norwegian energy major Equinor is also a partner in the BP-led Net Zero Teesside project development in the UK, which proposes to build a newbuild gas-fired power station with carbon capture, and extend the CCS infrastructure to the neighbouring industrial cluster. Other energy companies involved in this project include Eni, Shell, and Total.

Net Zero Teesside is a CCUS project with an aim of taking CO2 from the range of industries in Teesside, then taking it to a central gathering point, compressing it, sending it offshore, and storing it in an underground reservoir in the North Sea. Teesside’s location offers access to storage sites in the southern North Sea with more than a gigaton of CO2 storage capacity.

The project plans to capture up to 10 million tonnes of carbon dioxide emissions, the equivalent to the annual energy use of over 3 million UK homes.

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The offshore transportation and storage infrastructure developed through the Northern Endurance partnership in the southern North Sea will serve the Net Zero Teesside and the nearby CCUS project Zero Carbon Humber (ZCH).

The Northern Endurance was formed in October 2020 between Net Zero Teesside consortium partners – BP, Eni, Equinor, Shell, and Total – and National Grid to develop carbon dioxide transport and storage infrastructure in the UK North Sea, with BP as the operating company.

If successful, the Northern Endurance Partnership linked to NZT and ZCH will allow decarbonisation of nearly 50 per cent of the UK’s total industrial emissions.

Both projects aim to be commissioned by 2026 ‎with realistic pathways to achieve net-zero as early as 2030 through a combination of carbon capture, ‎hydrogen, and fuel-switching.

The UK’s HyNet North West project is based on the production of hydrogen from natural gas. It includes the development of a new hydrogen pipeline and the creation of the UK’s carbon capture and storage infrastructure for industrial CO2.

The carbon capture and storage project will re-use the Liverpool Bay oil and gas fields in the East Irish Sea. The site, owned by Italy’s oil and gas company Eni, has an estimated CO2 storage capacity of 130 million tonnes and gas extraction is likely to cease within the required project timeframe.

The UK’s offshore oil and gas regulator, the Oil and Gas Authority (OGA), awarded the CO2 appraisal and storage licence to Eni in October 2020.

In March 2021, the UK government granted £33 million in funds to support the HyNet project, covering around 50 per cent of the investment necessary to finalise ongoing planning studies with the aim of the site becoming operational by 2025. The funds were received from UK Research and Innovation, through its Industrial Decarbonisation Challenge fund.

Following the £33 million funding, the project also received £39 million in funding from the consortium partner contribution in April 2021, which will allow the project to accelerate to FID in 2023 for the initial phase.

Once operational, the project will help reduce CO2 emissions by up to 10 million tonnes every year by 2030, delivering 80 per cent of the Government’s new UK-wide target of 5GW of low carbon hydrogen and playing a crucial role in the target of net-zero emissions in 2050.

Progressive Energy, Cadent, CF Fertilisers, Eni UK, Essar, Hanson, INOVYN, and the University of Chester are partners on HyNet North West hydrogen and CCS project.

In order to provide safe storage for CO2 emissions which cannot be avoided, Norway’s Equinor is also developing a project which will provide carbon storage as a service.

In partnership with oil majors Shell and Total, Equinor in May 2020 took a final investment decision on the Northern Lights project, Europe’s first commercial-scale carbon transportation & storage project off the coast of Norway, with an initial investment of almost NOK 6.9 billion ($839.6 million).

The Northern Lights is part of the Norwegian full-scale carbon capture and storage project called Longship or, in Norwegian, Langskip. The project has been described by the country’s Minister of Petroleum and Energy, Tina Bru, as the greatest climate project in the Norwegian industry ever.

The full-scale project includes the capture of CO2 from industrial sources in the Oslo-fjord region (cement and waste-to-energy) and shipping of liquid CO2 from these industrial capture sites to an onshore terminal on the Norwegian west coast. From there, the liquified CO2 will be transported by pipeline to an offshore storage location subsea in the North Sea, for permanent storage.

Equinor in October 2020, awarded the first big contract for the Northern Lights project, which went to Skanska. The contract is for building site preparation and the construction of jetty facilities for the CO2 receiving terminal.  

Following a historic vote in the parliament, the Norwegian Government in December 2020 announced its funding decision for the Northern Lights CO2 transport and storage project.

Only days later, Equinor awarded two key contracts for the project, which included the one for the engineering, procurement, and construction of the onshore plant facilities at Energiparken in Øygarden and delivering a subsea injection system for the CO2 well in the North Sea.

The contracts, with a total value of NOK 1.3 billion ($158 million), were awarded to Kvaerner and Aker Solutions.

Furthermore, Subsea 7 and Aibel were also hired for the project under contracts awarded in January 2021.

Subsea 7 was awarded a contract for engineering, fabrication and installation of a 100 kilometres CO2 pipeline that will run from Øygarden to the CO2 storage complex, as well as installation of umbilicals, tie-in and pre-commissioning activities. Aibel won an EPCI contract for the Northern Lights subsea control system located on the Oseberg A platform.

The Northern Lights project will be developed in phases with Phase 1, which is expected to be completed in mid-2024, including capacity to transport, inject, and store up to 1.5 million tonnes of CO2 per year. Once the CO2 is captured onshore by industrial CO2-emitters, Northern lights will be responsible for transport by ships, injection, and permanent storage some 2,500 metres below the seabed. The facility will allow for further phases to expand capacity.

Port of Rotterdam CO2 Transport Hub and Offshore Storage project, known as Porthos, is a joint venture between the Port of Rotterdam Authority, Gasunie, and EBN.

The project is being developed as the Netherlands is working to lower emissions by 49 per cent by 2030 and by 95 per cent in 2050 relative to 1990 levels as part of its climate objectives.

The importance of CCUS for the energy transition has been underlined by the country’s national coalition agreement and the national Climate Agreement.

The Porthos project will transport the CO2 captured by the industry in the Port of Rotterdam and store it in empty gas fields beneath the North Sea. The project plans to store an annual amount of 2.5 million tonnes of CO2.

In 2019, oil majors Shell and ExxonMobil as well as Air Liquide and Air Products joined the project through a Joint Development Agreement (JDA) with Porthos JV partners, committing to continue with the permit procedures and the technical preparation of the project.

After signing the sequel to the first JDA in the fall of 2020, Porthos and the four partners agreed to keep working together towards the realisation of definite transport and storage contracts.

During 2020, the JDA partners also applied for subsidies from the Dutch government as part of the SDE++ or the sustainable energy transition subsidy scheme. Reports from earlier this week confirmed that the Dutch government will grant around $2.4 billion in subsidies to the Porthos consortium for the CCS project.

After the grant is awarded, the permit procedures are expected to be completed by late 2021 and the entire year will be used to prepare for the construction of the capture plants.

Following the FID, planned for 2022, the project is set to become operational in 2024 and expected to reduce emissions in the industrial cluster around the Port of Rotterdam by around 10 per cent.

During the year, the Porthos project organisation will be working on the technical preparations of laying pipes on land and the seabed, building the compressor station, and adjusting the platform at sea.

Apart from its participation in Porthos, ExxonMobil has also recently revealed its vision for a massive $100 billion CCS project, with Houston, the energy capital of the world and the home to over 12,000 ExxonMobil employees, being assessed as one of the potential locations.

In addition to being one of the largest industrial emission sources in the country, Houston’s proximity to geologic formations in the Gulf of Mexico that could store large amounts of CO2 is also an important factor.