Carbon capture off the agenda: at Draugen
Duo ditch costly Draugen CO2 plan
Statoil and Shell have dropped plans to inject carbon dioxide into the Draugen reservoir in a bid to enhance oil recovery, saying the move is uneconomical.
The pair made the announcement today after studying the recommendations of a Nkr400 million ($67.7 million) joint feasibility study, which started in March last year.
The preliminary plans had envisaged capturing carbon dioxide from a gas-fired power plant to be built at Statoil's Tjeldbergodden methanol complex, piping it offshore to the Shell-operated Draugen field, in the Norwegian Sea, and injecting it into the reservoir to boost oil recovery.
"The evaluation shows that though the value chain is technically feasible, it is not commercially viable," Statoil and Shell said in a joint statement.
"The extra oil volumes that the Draugen licence operator (Shell) believes to be recoverable are too low to justify the necessary investments in the field," they said.
Modifications of the platform would have been extensive and required a year-long production shutdown, they added.
Statoil and Shell had said from the beginning that the concept was highly challenging and that financial support from the government would be needed to make it viable.
Carbon capture and storage is still in a pioneering phase.
Industry and governments have had high hopes that burying carbon dioxide underground or below the seabed could help reduce emissions that are widely blamed for causing global warming.
Statoil has been reinjecting carbon dioxide separated from the natural gas stream at its Sleipner field in the North Sea for a decade.
But capturing and burying carbon dioxide emissions from power plants would be a new step in Norway which is rich in hydropower and is only now planning to build gas-fired plants.
"Gas-fired power production in Norway is in itself highly challenging, and with carbon capture it is currently not profitable," Statoil and Shell said.
"The companies will during this autumn complete the technical studies on carbon capture, and continue to explore if there is a possibility to establish the gas power plant at Tjeldbergodden with carbon dioxide capture and storage," they said.