With phase 1 fully booked, Northern Lights partners take €662M FID for project expansion

Northern Lights joint venture (JV) partners Equinor, Shell and TotalEnergies have made a final investment decision (FID) to progress phase two of the namesake CO2 transport and storage development. This will increase the project’s transport and storage capacity from 1.5 million to over 5 million tons of CO2 per year from 2028.

The first phase of Northern Lights is part of the Longship full-scale carbon capture and storage (CCS) project, initiated by the Norwegian government and designed to demonstrate large-scale CO2 capture, transport, and storage. Northern Lights focuses on the transport and storage aspects.

Captured and liquefied CO2 from customers’ sites is transported by ship to the onshore receiving terminal at Øygarden, then further transported via pipeline to a storage in a reservoir 2,600 meters under the North Sea seabed.

The official opening ceremony of the CO2 transport and storage facility in Øygarden, near Bergen, was conducted by the Norwegian Minister of Energy on September 26, 2024, signaling the facility’s readiness to receive and store CO2.

The first phase of the project is completed, fully booked and ready to receive CO2 from industrial emitters. Operations are expected to start this summer, with the first CO2 transportation by ship from Heidelberg Materials’ cement factory in Brevik, Norway, its injection and then permanent storage.

The Northern Lights JV has now made an FID for the second phase, representing an investment of NOK 7.5 billion (around €662.4 million), including the award of €131 million from the Connecting Europe Facility (CEF) funding scheme, approved by the European Commission in June 2024.

This second phase leverages existing onshore and offshore infrastructures in Øygarden, with the expansion including new onshore storage tanks, pumps, a jetty, injection wells and transport vessels, all expected to be completed for a start-up by the second half of 2028.

The FID for the second phase follows the signature of a 15-year commercial agreement with Swedish district energy provider Stockholm Exergi for the cross-border transport and storage of 900,000 tons of biogenic CO2 emissions annually, as part of the large-scale Bio-Energy Carbon Capture and Storage (BECCS) project.

Stockholm Exergi is the fifth company to commit to Northern Lights for transport and storage of CO2 emissions, after Heidelberg Materials and Celsio in Norway, Yara in the Netherlands and Ørsted in Denmark. In addition, Northern Lights is in advanced discussions with several large European industrial customers to market the remaining storage capacity.

“The decision to expand our CO2 transport and storage services represents the next step in building a commercially viable CCS market in Europe. It confirms Northern Lights’ commitment to offer an effective solution for companies to reduce emissions,” said Tim Heijn, Managing Director of Northern Lights JV.

“The investment decision is an important milestone for our company, our customers and industry partners, governments, and regulators. We have jointly been working hard to establish the CCS chain and make a real difference enabling Europe to achieve climate targets.”

Equinor will remain the technical service provider (TSP) for phase two, responsible for development, construction and operation on behalf of the partnership.

“I am very pleased that the partners in Northern Lights have progressed to the second phase of the Northern Lights project. As the recently published European Clean Industrial Deal makes clear, large-scale carbon capture, transport and storage will be crucial in the energy transition as it offers a solution for hard-to-abate industrial emitters to decarbonize their processes,” said Irene Rummelhoff, Executive Vice President for Marketing, Midstream and Processing at Equinor.