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Norway approves CO2 storage capacity exceeding Northern Lights

06 April 2022 Cristina Brooks

Norway will develop CO2 storage capacity that is three times the size of the largest facility currently planned in the country, the under-construction Northern Lights project.

Norway licensed state-controlled energy company Equinor to operate two CO2 storage locations on the country's continental shelf, the company said in a 5 April statement.

Beyond these two storage sites, Equinor plans more CO2 projects in the North Sea and will connect them by pipeline to make each cheaper to use, aiming to develop CO2 storage sites with a combined annual capacity of 15-30 million metric tons (mt) by 2036.

The first of the sites, Polaris, will provide CO2 storage of up to 2 million mt per year for Equinor's Barents Blue joint venture, which is planning to build Europe's first large-scale blue ammonia plant.

Blue ammonia is being studied as a possible low-carbon fuel for the shipping industry. The plant would use natural gas sourced from the Barents Sea via an LNG plant on Melkøya Island.

The second storage spot will be sited in the natural geological formation called Smeaheia in the North Sea. It will offer CO2 storage "on a commercial basis" to industrial customers in the steel, cement, and heavy industry sectors.

Equinor plans to offer Smeaheia's CO2 storage services to companies across Europe. "We see that demand for CO2 storage is increasing in several countries, and we want to get started with developing new CO2 storage quickly so that we can offer industrial solutions that can contribute to decarbonization in Europe," said Irene Rummelhoff, Equinor executive vice president for marketing, midstream, and processing in the statement.

Storing CO2 at Smeaheia has been on Norway's radar for some time. Norwegian state enterprise Gassnova proposed the site for a pilot project in 2014, Mongstad Carbon Capture and Storage (CCS).

At 20 million mt per year of CO2 storage capacity, Smeaheia dwarfs the capacity planned for the country's current flagship CCS project, Northern Lights, which is initially set to store 1.5 million mt of CO2 per year in 2024 and scale up to 5-6 million mt per year by around 2026.

Northern Lights had its origins in a 2016 government feasibility study and may also offer CO2 storage as an export service.

Managing the offshore part of the project through the Northern Lights JV, Equinor, Shell, and TotalEnergies are developing CO2 storage and shipping infrastructure, while the Longship CCS joint venture is developing an onshore terminal for storing the captured emissions from cement and waste-to-energy industrial plants.

Equinor already operates the only commercial CO2 storage off Norway at the Sleipner and Snohvit fields. Sleipner is used for natural gas production and has at least 1 million mt per year capacity and the Snohvit location had captured 3 million mt of CO2 in 2016.

Equinor's ongoing CO2 storage effort

Equinor's Sleipner site is the largest of the five operational CO2 storage locations in Norway, according to data from the US government's National Energy Technology Laboratory.

Equnior's canceled or downsized projects include Mongstad, which was run by a predecessor of the Northern Lights JV, although it was partially abandoned in 2013 due to high costs.

Both Mongstad and Equinor's Hydro Natural Gas Processing Facility CO2 storage were canceled for financial reasons. Beyond 2030, CCS costs are expected to fall due to an increase in capture capacity, however some costs might increase in the meantime, according to a report from S&P Global Commodity Insights.

The issue of stubborn high costs for CCS is a global one. A US congressional watchdog, the Government Accountability Office, recently advised changing federal subsidy programs for CCS projects as were seen as risky investments.

Industrial CO2 storage gets EU grants

Industrial companies across Europe are ramping up decarbonization projects that require CO2 storage.

Four out of seven projects awarded €1.1 billion from the EU's fund for low-carbon demonstrators last week will involve CO2 storage, including one in France set to use North Sea CO2 storage.

The project involving French gas supplier Air Liquide and cement maker EQIOM will rely on North Sea CO2 storage facilities to store CO2 captured from cement production processes. It will demonstrate cryogenic carbon capture technology, which the partners said would be a first at this scale, and ship CO2 to an unnamed North Sea storage facility.

Another carbon storage project backed by Air Liquide and German chemical company BASF is foreseen for the Port of Antwerp in Belgium. The Kairos@C project involves a large cross-border carbon capture and storage value chain to capture, liquefy, ship, and store CO2.

In the capital of Sweden, district heating company Stockholm Exergi aims to create a full-scale bio-energy carbon capture and storage facility at an existing biomass-fired combined heat and power plant, raising the prospect of low- or negative-emissions public power production.

Finally, a blue hydrogen production project that requires CO2 storage is envisioned at Finnish oil producer Neste's Porvoo oil and biodiesel refinery in Finland.

The projects will all receive grants funded by revenues from the EU Emissions Trading System.

Posted 06 April 2022 by Cristina Brooks, Senior Journalist, Climate and Sustainability

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.


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