A landmark year for CCUS in Northwest Europe

Extract of Licence CS004. Source: Westwood Atlas New Energies

2023 is turning into a landmark year for carbon capture, utilisation and storage (CCUS) in Northwest Europe. Westwood has summarised key developments in the UK and Norway, the markets with the majority of offshore storage capacity in Europe.

In the UK we have already seen significant government announcements on funding:

• In the Spring Budget, the government pledged to invest £20 billion over 20 years to scale-up CCS projects across the UK. This was a welcomed announcement which will hopefully provide investors with the confidence they need to pursue CCS initiatives in the UK, especially considering the 2022 US Inflation Reduction Act will undoubtedly have attracted green investment away from the UK.
• The government also announced the eight carbon capture projects that will progress to the next phase of the Track-1 cluster sequencing process, proceeding to the negotiations for support through the relevant business models.
• Further announcements were made on the long-awaited Track-2 process, with the objectives set and a four-week Expression of Interest (EoI) period for the Transport and Storage Systems opened. The Acorn and Viking CCS projects are seen as front runners to be selected as the successful clusters, especially as they are not required to submit an EoI as they are viewed to have already met the eligibility criteria.
• One of the criteria for Track-2 eligibility is the project must have an existing carbon storage licence or have bid and successfully been awarded a licence as part of the UK’s first carbon storage licensing round.

The results of the UK’s first carbon storage licence round are expected to be announced imminently. The round opened on 14 June 2022 and the deadline for applications was 13 September, which attracted 26 bids from 19 companies.

BP has recently joined Harbour Energy in the Viking CCS project. Under the terms of the agreement, Harbour continues as operator of Viking CCS with a 60% interest, with BP acquiring a 40% non-operated share. Harbour and BP already share an interest in the Lincolnshire Offshore Gas Gathering System (LOGGS) pipeline, which is intended to be repurposed as part of the project.

In Norway, competition has been intensifying for CO₂ storage acreage being made available. Acreage announced in November 2022, with a two-month application window, drew three applications from six companies. In March 2023, two storage licences were offered out of this available acreage. Acreage announced in January 2023, with a six-week application window, drew applications from five companies. Award is expected in the first half of 2023.

Construction of the Northern Lights project Phase 1 is progressing, with a number of milestones being achieved. In April, the first temporary CO₂ storage tank was installed at the receiving facility in Øygarden, while the first two CO₂ transport carriers marked the start of formal construction with a keel laying ceremony at the Dalian Shipbuilding Industry Co. yard in China.

Elsewhere in Norway, Equinor and Vår Energi discontinued their participating interests in the Barents Blue ammonia project and the associated carbon storage project, Polaris, following the expiry of their cooperation agreement on 31 January 2023. The withdrawal leaves Horisont Energi as the only remaining participant in the carbon storage project.

To support these recent and upcoming developments, Westwood has further enhanced its Atlas New Energies solution to include Carbon Storage Licences and Licence Rounds, allowing a user to:

• Track carbon storage licences including ownership, timelines and work programmes.
• Track carbon storage licence rounds and monitor acreage being made available for application.
• View the spatial extent of both awarded licences and acreage available and understand how they interact with underlying oil and gas fields, infrastructure, legacy exploration and appraisal wells, prospects and discoveries, as well as existing and proposed offshore wind farms.

Atlas New Energies is available as a fully integrated module in the Atlas Northwest Europe E&P application, or as a standalone solution. For more information or to request a product demonstration, click here or contact [email protected].

Stuart Leitch, Senior Analyst
[email protected]