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European oil majors have selected the builders of a Carbon
Capture and Storage (CCS) demonstration project seen as key to
meeting Norwegian-and global-emissions reduction and blue hydrogen
goals.
Norway's parliament, the Storting, approved funding for 70% of
the US$2.6 billion project, called Longship CCS, in December 2020.
State-controlled energy company Equinor, along with Shell and
Total, manage a part of the project through their Northern Lights
joint venture, focusing on the offshore part of the process,
including storage and shipping.
They have now signed up contractors to start building the
project in 2022 on the path to ramping it up in 2024. Equinor on 28
January said it had hired contractor Subsea 7 Norway to build
pipelaying and subsea installations and Aibel to build a subsea
control system. Aibel's work will be carried out at Equinor's
existing concrete offshore platform Oseberg A, alongside an
offshore natural gas processing and drilling facility just off the
western coast of Norway.
"Most contracts are now in place, and we look forward to working
together with the selected suppliers to realize this pioneering
project," said Equinor Chief Procurement Officer Peggy
Krantz-Underland in a statement.
The Longship CCS project is set to capture emissions from at
least one industrial facility, a cement plant—with the addition
of a waste incineration plant to be decided in the future. It will
see carbon dioxide (CO2) transported by ship to an offshore rig,
then piped into a reservoir under the seabed for storage.
Beyond demonstrating the value of CCS at scale in Europe,
Longship CCS is one of few, if any, such projects to use a ship for
CO2 transportation, allowing more businesses to participate in
carbon storage, said Shell. It is also one of few to focus on
industrial rather than power generation emissions, analysts at IHS
Markit wrote in a recent paper on the project.
The project is specifically designed to handle imported
industrial emissions from the rest of Europe, where certain
industries are obliged to buy carbon allowances under the EU
Emissions Trading System (ETS). Several industrial emitters already
have tentative deals with the project, according to Shell.
According to Norway's government, Longship CCS also facilitates
the EU's Green Deal, the legislative framework for reaching its
goal of a 55% emissions reduction compared with 1990 levels by
2030.
Beyond helping many to toe the line on EU laws, CCS could be a
crucial part of global obligations under the Paris Agreement. A
2018 paper by the Intergovernmental Panel on Climate
Change found CCS is required under three of four pathways to
avoiding catastrophic global warming by keeping the global
temperature increase below 1.5 degrees Celsius (34.7 degrees
Fahrenheit) compared with pre-industrial levels.
Blue hydrogen
Apart from proving carbon capture technology, Longship CCS is
"foundational" for the fledgling market for blue hydrogen, the
lower-carbon fuel made from natural gas that uses CCS to stash the
emissions away, the IHS Markit paper said.
Gas-rich Norway could profit from blue low-carbon hydrogen.
"Longship facilitates the production of blue hydrogen from natural
gas with carbon capture and storage. This results in hydrogen with
very low emissions and major potential for value creation in Norway
and for greenhouse gas emission cuts in Europe," Norway's
government said in the statement.
Equinor is also targeting blue hydrogen from natural gas in
trial projects. It produces blue hydrogen in the English town of
Hull under its UK-government-backed Zero Carbon Humber project
launched in 2019. The state-controlled oil company is looking to
produce hydrogen for consumers in industry, particularly the steel
industry, as well as for power generation and storing carbon from
power generation through its Magnum project with Swedish utility
Vattenfall.
"This background in CCS makes us see that it's also going to be
a key enabler, we believe, for clean hydrogen production at
industrial scale," Equinor's Head of R&T Low Carbon O&G
Technologies Hege Rogno told the Go Net-Zero Carbon Energy webinar
on 27 January, adding that the company plans to produce hydrogen
for maritime markets in Norway.
She said fossil fuel-sourced hydrogen is not new and that it's
not necessarily outdated in a low-carbon world. "What's new now is
that we'll take this CO2 out of the mix through production and
storage under the subsurface. We believe we can do that, capture
more than 95% of the CO2, and through that produce clean hydrogen
that can be used for energy-intensive segments for power and heat
generation, heavy transport, maritime transport and industry," said
Rogno.
Equinor's blue hydrogen could compete with green hydrogen. "I
think it's important to point out that the CO2 footprint of
hydrogen produced from natural gas will be very low. In the
instances where we produce and use new reforming technologies, we
can capture 95% to 97% of the CO2. So, it will be on par with
hydrogen produced from electrolyzers, or from renewable energy,"
she said.
Covering all bases, Equinor also has a foot in the door on green
hydrogen as a partner in NortH2. This project will use an
electrolyzer facility to produce green hydrogen from an offshore
wind farm in the Netherlands.
All these plans sound optimistic, but the future of the CCS
market that blue hydrogen relies upon depends on the success of
projects like Longship CCS in the face of claims it remains
unproven.
Norway's previous attempt at CCS was called a "catastrophe" by Per
Brevik, European head of sustainability at HeidelbergCement Group,
whose subsidiary is involved in the capturing part of Longship CCS.
Norway's government decided to shutter the
high-profile CCS plant at Mongstad-which Equinor, Total, and Shell
also had an interest in-in 2013. This was just a year after it was
inaugurated, with the government citing high costs and the low
prices for carbon credits the project hoped to produce.
Equinor believed high costs and a lack of CO2 storage facilities
had previously limited the development of a low-carbon value chain
for natural gas-derived hydrogen, according to a 2017 statement.
CCS must also face up to critics who say it is not net-zero
because of methane leaks in the fossil fuel supply chain and,
possibly, in CCS storage, meaning the cost of insuring against
leaks must be borne by the taxpayer,
according to the chief executive of UK electrolyzer
manufacturer ITM Power, Graham Cooley.
Norway goes all in on CCS
This month, Norway's government tightened its Paris Agreement
decarbonization goal to 50-55% emissions reductions by 2030, upping
the ante in its pursuit of viable domestic CCS. It is gearing up to
publish an explanatory white paper.
While Norway plans to decarbonize in the future, it will not
halt production at oil and gas fields, according to Minister of
Petroleum and Energy Tina Bru, who spoke at Davos Energy Week on 19
January. "Our long-term goal is not to reduce production by 50%.
It's to reduce emissions by 50%. Our long-term goal for the
region's oil and gas sector is to maintain stable production at
levels that we're seeing now," she said.
"That will, of course depend on whether we find more kinds of
investments, kinds of projects that are going forth on the common
continental shelf," said Bru, referring to the area where
construction of Longship CCS and fossil fuel projects is taking
place.
Bru said that Norway's goal was "to produce all profitable
resources" from regional oil and gas, but this will mean developing
the decarbonization aspect of that industry and increasing a CO2
tax on producers from about US$69 per metric ton to US$234 per
metric ton by 2030.
Norway's efforts to drive its climate goals forward at the same
time as continuing oil and gas production seem to at least partly
rely on CCS. "[Hydrogen] is another thing that we can see the
potential for here in Norway, not only because we have huge natural
gas resources that can be created for hydrogen using CCS, which
will remove the emissions from that hydrogen," said Bru.
She implied Norway would be providing a global CCS service. "At
the Northern Lights project, the storage has the capacity for CO2
emissions storage from other places in the world," said Bru,
adding: "I think this is also something that we can use if we
wanted to pull out hydrogen from natural gas on a big scale.
Because it has to be clean, there really isn't room for emissions
from energy sources when we're getting to 2030 and up to 2050. So,
we have to plan for energy that is clean. But I think gas can also
play a role when it comes to hydrogen."
At the same time, the nation's abundant supply of renewable
energy makes green hydrogen a potential resource as well. "We're
creating a roadmap for that to follow up on the strategy for
hydrogen that we actually presented just last year," said Bru.
Posted 29 January 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability