BP will assist in the development of one of the UK’s most important carbon capture projects. This is part of the Government’s push to get net zero.
Oil and gas giant Shell is paying an undisclosed amount for a 40% stake in Viking’s carbon capture and storage project (CCS), which Harbour Energy, its North Sea rival, owns.
The project will use carbon dioxide from factories in the Humber area to stash it in empty gas fields beneath the southern North Sea.
Harbour plans to store as much as 10 million tonnes of carbon dioxide annually by 2030. This is around a third off the Government’s national goal.
BP has invested in carbon capture to help it move towards cleaner energy. It is also building a gas-fired plant in Teesside with the technology.
Anja Dotzenrath from BP said that the Viking CCS project would “play an instrumental part in helping to decarbonise Britain” and could also serve as “a future CO2 shipping destination”.
Harbour Energy’s chief executive Linda Cook said that the project could “unlock billions upon billions of dollars of investment” in carbon storage and capture technology, as well as the industries it affects.
To meet its legally binding goal of cutting carbon dioxide emissions by net zero by 2050, the Government relies on such projects.
This technology captures carbon dioxide as it is released, such as at factories or power plants, and stores it underground to ensure it doesn’t escape into the atmosphere.
Although it isn’t yet being used in large scale in the UK , there are many projects underway, including the Acorn CCS Project in Scotland.
Harbour Energy and BP have backed the technology. This is a good sign that the technology has a better commercial case, which raises hopes that a UK industry will emerge after several failed starts.
Because of the vast North Sea oil and gas reserves, where carbon dioxide can still be stored, the UK is considered an ideal staging area.
Harbour Energy stated that it will make a final investment decision regarding the Viking project in 2013, depending on government support.
Harbour Energy could be the project’s operator, holding a 60% stake.
The plans call for a 55 km buried pipeline that will transport emissions from Immingham’s heavy industry to the Thedlethorpe Gas Terminal off the Lincolnshire coast.
An existing 120km pipeline will transport the emissions to the Viking gas fields. These fields stopped producing gas in 2018 and are now depleted.
The government supports the emerging industry for carbon capture, including grants and guarantees on revenues.
The Government announced in March that it would invest PS20bn in the industry over the next 20 year. Levies on consumer bills will provide some of the financial support.
According to the Treasury, the funding will provide the industry with the “certainty needed to deploy CCUS [carbon capture utilisation and storage] at speed and scale”.
This is after David Cameron pulled PS1bn of planned funding for UK carbon capture trials in 2016
This prompted Shell and SSE to withdraw from their respective projects. Both are involved in the development of new UK projects.
The government selected two projects near Hull, Liverpool and was able to quickly get them up and running in a matter of years.
Ministers indicated that the Acorn and Viking projects might be next in line for support.
Harbour Energy is North Sea’s largest producer of oil and natural gas. However, it recently announced plans to move investment overseas due to the UK’s windfall tax on oil production.
BP intends to invest as much as PS18bn this decade in UK operations, including oil and gas production and wind farms.