Norway OK's Funds for Northern Lights CCS Project
The first phase of the project is set for completion in 2024. As a part of the project, Equinor, Shell, and Total will establish a new joint-venture enterprise. Equinor has awarded two EPC contracts.
The Norwegian government approved funding for the Northern Lights carbon capture and storage (CCS) project, which includes support by partners Equinor, Shell, and Total.
Northern Lights will provide infrastructure for the transport of CO2 from industrial capture sites to a terminal in Øygarden, Norway, for intermediate storage before being transported by pipeline for permanent storage in a reservoir 2600 m under the seabed of the Norwegian continental shelf.
The project is the transport and storage component of Longship, the Norwegian government’s full-scale CCS project, for which it has agreed to fund 67% of the total required investment of $2.9 billion. It will finance 80% of the $791 million needed for the first stage of development.
The project began evaluation of the selected Aurora reservoir area, which is near Equinor’s Troll field, for CO2 storage in June 2018. Gassnova carried out the study in the Johansen formation between 2008 and 2012. The study, based on a conceptual model, concluded that the formation can store large amounts of CO2, and driven by buoyancy, the CO2 will migrate northwards over time and accumulate below the Troll field reservoirs.
The study recommended that a well be drilled to confirm the presence of sand with sufficient permeability for injection of CO2, sufficient porosity for monitorability, and sufficient connectivity to provide enough storage capacity in the Aurora license area.
The exploitation license EL001 Aurora was awarded in January 2019. In March 2020, the exploration well 31/5-7 (EOS) encountered a total of 173 m of water-wet sandstone in the prospect, with good to very-good reservoir quality in the Cook and Johansen formations, according to a press release from the Norwegian Petroleum Directorate. A 75-m thick seal from the Lower Drake shale formation was also proven.
Above the storage unit, the Drake formation will act as the caprock, preventing the migration of the CO2 out of the storage unit. The presence of the Troll hydrocarbon reservoirs shows that there are efficient barriers further above that would prevent the injected CO2 from reaching the seabed.
In a press conference on Tuesday, Total Chairman and CEO Patrick Pouyanné said, "The North Sea is offering a big potential to Europe because we can imagine hydrocarbon production will diminish, in particular in the Netherlands, Denmark, and some part of the UK. There could be life beyond these depleted fields, to develop an active carbon-storage industry.”
He added, “CCS is key to achieving carbon neutrality in Europe and is fully part of our Climate Ambition to get to net-zero emissions by 2050.”
Norway’s Minister of Petroleum and Energy Tina Bru said, “Carbon capture and storage is important to achieve the goals of the Paris Agreement. Longship is the largest climate project ever in the Norwegian industry and will contribute substantially to the development of CCS as an efficient mitigation measure. Working together with the industry, the step-by-step approach has confirmed that the project is feasible.”
Shell CEO Ben van Beurden highlighted the project as a “service to industrial emitters who can now take action on emissions that can’t be avoided. This is key to bringing real progress towards tackling climate change.”
Equinor, Shell and Total made a conditional investment decision on the Northern Lights CO2 transport and storage project in May 2020. The partners are now in the process of establishing a joint venture, which will be for all project activities, including business development.
Phase one of the project will be completed mid-2024 with a capacity of up to 1.5 million tons of CO2 per year. Through additional phases of development and an increasing customer base, the storage capacity is planned to increase to 5 million tons per year.
EPC Contracts Awarded
Kværner AS has received a letter of award for the engineering, procurement, and construction (EPC) contract for the onshore plant facilities at Energiparken in Øygarden. The onshore plant will receive and store liquid CO2 before it is exported through a pump and pipeline system for injection offshore. The value of the contract is estimated at around $122 million. The startup of the work is planned in January 2021, and completion is planned by Q1 2024. Kværner AS is a fully owned subsidiary of Aker Solutions.
Aker Solutions AS has been awarded an EPC contract for delivering a subsea injection system for the CO2 well in the North Sea. The contract is awarded as a calloff under the framework agreement signed with Equinor in 2017. The value of the contract is around $29 million. The work will start in January 2021 with installation and completion in 2023. The contract also includes options for equipment for future wells.