Page 5 - Euroil Week 48 2019

EurOil COMMENTARY EurOil
Equinor searches for CO2 storage space
The company is working on Norway’s largest carbon, capture and storage project to date
NORWAY
WHAT:
Equinor is progressing its Northern Lights offshore carbon capture project.
WHY:
Oil companies have come under increasing pressure to cut their carbon footprint.
WHAT NEXT:
The industry will need to demonstrate that fossil fuels can be produced more cleanly to convince policymakers that they have a role to play in the energy mix for decades to come.
NORWAY’S Equinor, France’s Total and Royal Dutch Shell began drilling a wildcat well in the Norwegian Sea on November 29, but their objec- tive is not to nd oil or gas. Instead, the group are testing a reservoir south of the Troll gas eld to see whether it is suitable for storing carbon dioxide.
e project, known as Northern Lights, aims to establish a carbon, capture and storage (CCS) chain capable of removing up to 5mn tonnes of CO2 from various industrial sites in Norway, helping in the country’s e orts to tackle its emis- sions. CO2 would rst be captured at industrial plants onshore and then compressed, ready for transport via ship to storage sites. It would then be stored permanently in reservoirs at least 1,000 metres below the seabed.
Advocates for CCS say it can be used by oil and gas companies to reduce their carbon foot- print substantially while continuing to produce fossil fuels. Oil and gas companies have come under mounting pressure from shareholders and environmental groups to address climate change adequately. Some investors have even gone as far as divesting from companies they feel are not taking the issue seriously enough.
In a sign of the times, the European Invest- ment Bank (EIB) recently pledged to stop nanc- ing for fossil fuels by the end of 2021, cutting the sector o from €2bn ($2.2bn) in annual funds. Meanwhile European Commission Presi- dent Ursula von der Leyen, who took o ce on December 3, has taken a much tougher stance against oil and gas than her predecessor Jean- Claude Juncker.
Demonstrating potential
CCS has its fair share of opponents, however, who say its expense makes it unfeasible, with Northern Lights’ cost alone estimated in 2016 at between NOK7.2-12.6bn ($0.79-1.38bn). Some scientists have also cast doubt on how much of an impact CCS can have on carbon emissions levels, pointing to the rapid deployment of renewables as a much more e ective solution.
The Northern Lights partners are drilling their well using Seadrill’s West Hercules rig to a depth of around 2,700 metres. If the well
indicates good reservoir properties, a decision will be taken and a rst CO2 injector well will be drilled as a sidetrack of the original wildcat.
Northern Lights will by no means be the rst time CO2 has been stored in Norwegian reser- voirs. Since 1996, the pollutant has been sepa- rated from gas stored at the Sleipner Vest eld and injected into the Utsira formation. Around 1mn tonnes of CO2 is stored in this way each year. Since 2007, a further 700,000 tonnes of CO2 has been stored annually at the Snohvit eld as well. However, Equinor’s project will be the rst time the country has stored CO2 emitted by onshore industry on such a large scale.
Equinor and its partners are hoping to tap extra funds for Northern Lights from the Nor- wegian government, which has already spent more than NOK825mn on the venture to data. ey took a crucial step towards securing this funding in September, when they signed memo- randa with seven potential industrial customers for the project. Earlier, the government had said Equinor rst needed to demonstrate there was a su cient market for CCS. e companies to sign up were Air Liquide, Arcelor Mittal, Ervia, Fortum, HeidelbergCement, Preem and Stock- holm Exergi.
e UK also wants to progress CCS technol- ogy, but has lagged behind Norway in imple- menting projects. Industry association Oil & Gas UK published a report on December 3 urging the government to do more to support its imple- mentation, as well as that of other low-carbon technologies such as hydrogen’s use as a fuel.
Source: Equinor
Week 48 05•December•2019 w w w . N E W S B A S E . c o m
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