Page 17 - Euroil Week 21 2020

EurOil PROJECTS & COMPANIES EurOil
Tests start at Swedish carbon capture plant
SWEDEN
The plant will capture carbon that will be transported to off the coast of Norway for storage.
NORWAY’S Aker Solutions announced on May 26 it had launched tests at a pilot carbon capture plant at the Lysekil oil refinery in Sweden.
The 220,000 barrel per day (bpd) Lysekil plant is operated by Preem, Sweden’s biggest fuel producer. Also assisting in the carbon-capture project is Sweden’s Chalmers University of Tech- nology, Norway’s Equinor and the Norwegian research institute SINTEF. It has secured funding from the Swedish Energy Agency and Norway’s CLIMIT research and development initiative.
The pilot unit will capture CO2 released from the refinery’s hydrogen gas plant. The target is to have a full-scale carbon capture plant up and running at the site by 2025. The carbon will be transported to Norway and stored in offshore reservoirs.
“We are excited to bring our field-proven car- bon capture technology to Sweden for the first time,” Aker’s CEO Luis Araujo said.
According to Preem CEO Petter Holland, the full-scale plant could store up to 500,000 tonnes
per year (tpy) of carbon, or close to one-third of the refinery’s total CO2 emissions.
Preem was one of seven European companies that signed memoranda last year on the poten- tial use of the carbon, capture and storage (CCS) chain being developed by Equinor. The state oil producer wants to store carbon in depleted res- ervoirs in the North Sea.
Together with its partners Royal Dutch Shell and France’s Total, Equinor took a final invest- ment decision (FID) on the first phase of the CCS project, known as Northern Lights, earlier this month. It is expected to store up to 1.5mn tpy of CO2 by 2024.
Besides Preem, Air Liquide, Arcelor Mittal, Ervia, Fortum, HeidelbergCement and Stock- holm Exergi have expressed interest in the scheme.
The Norwegian government still needs to take its own FID on the venture, in order to pro- vide the necessary financing. The initial exploita- tion phase alone is slated to cost $670mn.™
Neptune posts strong Q1 results thanks to hedging
UK
The second quarter will be harder though, Neptune warns.
NORTH Sea producer Neptune Energy has reported relatively strong results for the first quarter, after hedging most of its production.
Earnings before interest, tax, depreciation, amortisation and exploration expenses (EBIT- DAX) came to $322mn in the three-month period, the UK independent said in a report on May 27, down around a third compared with a year earlier.
Cashflowwas$355mn,downfrom$362mn, as Neptune hedged its average gas price at $4.1 per 1,000 cubic feet ($155 per 1,000 cubic metres), versus $229.5 a year earlier. Without hedging, it would have sold its gas at only $102 per 1,000 cubic metres.
Neptune also gained from a 6.8% growth in production to 162,100 barrels of oil equivalent per day (boepd), and a slide in operating costs to $8.9 per barrel of oil equivalent (boe) from $10.1 in the first quarter of 2019.
“Despite the challenges posed by the [corona- virus] COVID-19 pandemic, Neptune’s opera- tional performance in the first quarter of the year was strong,” CEO Jim House said in a statement. “Our resilience plan and hedging activity miti- gated weaker commodity prices, resulting in a robust financial performance.”
Neptune is targeting full-year cost reductions
of $300-400mn.
However, House warned that the second
quarter would be “more challenging, and we expect production to be lower, reflecting planned maintenance and development-related shutdowns and weaker commodity prices.”
“We remain mindful of the impact of the pan- demic and have put in place measures to support our people, our suppliers and the communities inwhichweoperate,”hesaid.
Neptune recently dropped plans to buy Edi- son E&P’s North Sea assets from Energean Oil & Gas, which will require it to pay a $5mn cancel- lation fee. It is also deferring projects to achieve a $300mn cut in capital expenditure in 2020 to $700-800mn.
Among these deferrals, Neptune has delayed the launch of the Seagull field in the UK North Sea by 12-15 months. Neptune had aimed to bring the high-pressure, high-temperature (HPHT) field on stream by the end of 2021, tying it back to BP’s ETAP platform.
BP recently noted that the schedule to prepare ETAP for Seagull’s launch was “under review” due to “COVID-19 mitigation measures” and delayed maintenance at the Forties pipeline. This work is anticipated to start early next year, according to Neptune. ™
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