Anglo-Dutch giant Shell and Harbour Energy have clinched an agreement to become partners in the Acorn carbon capture and storage (CCS) project in Scotland, UK.
The two companies have joined project proponent Storegga — via the latter's wholly owned subsidiary Pale Blue Dot Energy — to become equal partners in a scheme that will capture carbon dioxide from industrial facilities in the St Fergus area and elsewhere and pipe it to storage reservoirs in the North Sea, for which a licence is already held.
The development, located on Scotland's east coast, also aims to produce blue hydrogen.
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge. Sign up here today.
By signing the Acorn Development Agreement, the trio of players will take the project through to a final investment decision, construction, operation and beyond.
Shell and Harbour — formed by the recent closure of a deal to merge Chrysaor and Premier Oil — had already been supporting the Acorn scheme for a couple of years.
French supermajor Total was also an initial backer but, according to a statement issued by Pale Blue Dot earlier this week, "decided to step down from the project as part of its portfolio management strategy".
Storegga said the Acorn CCS and hydrogen scheme "could provide critically important CCS and hydrogen infrastructure, helping industries and homes across Scotland and the UK to decarbonise".
The company said it anticipates the project could be up and running in the mid-2020s, providing there is "a clear pathway to help Scotland and the UK to meet their net-zero targets".
Acorn is expected to be storing at least 5 million tonnes per annum of CO2 by 2030, said Storegga, which it pointed out is equivalent to half the CO2 emissions set out in the UK government’s 10-point plan for a green industrial revolution by that date.
CO2 would come from the St Fergus gas terminal and Scotland’s carbon-intensive industries, while more would also be imported from elsewhere in the UK and Europe via Peterhead port in Aberdeenshire.
Storegga chief executive Nick Cooper said: "Safely and securely managing and removing the emissions of industry and society is our core business. This agreement cements our relationship with... Shell and Harbour Energy, and allows us to look forward with confidence to the next few years as we race to tackle climate change in a way that’s sustainable, cost efficient and deliverable".
Commenting on the agreement, Steve Phimister, Shell UK’s upstream director, said: “Shell will seek to have access to an additional 25 million tonnes a year of CCS capacity by 2035. We have large-scale projects being developed in Australia and Norway, and a facility in Canada (is) already capturing 1 million tonnes per year."
"But to reach net zero the world needs much more CCS capacity. The Acorn project is an exciting vision for how we could help deliver that for Scotland and the UK.”
Phil Kirk, Harbour's group president, added: “Investing in CCS initiatives is part of (our) commitment to a low-carbon future and attaining our operational goal of net zero by 2035."
"We are delighted to continue working in partnership with Pale Blue Dot Energy and Shell on what is an important catalyst project for supporting decarbonisation of this region.”
Last month, Scotland's authorities announced over £30 million ($41.2 million) of UK government funding for a suite of initiatives linked to the Acorn project.
The industry match-funded initiative, called Scotland’s Net Zero Infrastructure (SNZI) programme, brings together academic and industrial partners to develop a major package of work designed to progress a national low carbon infrastructure.
These include:
- Detailed engineering required to move the Acorn project to a final investment decision;
- Developing a new CCS-equipped power station at Peterhead that would become an early customer for the Acorn infrastructure;
- An assessment of the potential to re-use onshore pipelines to transport CO2 from central Scotland's industrial belt to Acorn's planned facilities;
- An engineering design programme for a carbon capture system on a gas-fired power station in Grangemouth;
- Development of a fabrication-ready design of a new class of ship, which can service the needs of coastal CO2 emitters around the UK for delivery at Peterhead.
According to Pale Blue Dot, the SNZI initiative could pave the way for onshore and offshore investments totalling in excess of £3 billion, and help map the longer-term economic impacts, including job preservation and creation, as Scotland transitions to low-carbon technologies such as hydrogen for fuel and CO2 removal.
Both the Scottish and UK governments have made legally binding commitments to reach net zero by 2045 and 2050, respectively.
Pale Blue Dot will project-manage the SNZI initiative with input from industry and academic partners.
These include SSE Thermal — based in Perth, Scotland — which is developing a comprehensive decarbonisation programme for Peterhead power station, while UK utility National Grid is exploring the potential repurposing of onshore gas pipelines to transport CO2.
London-listed Petrofac will support offshore pipeline and subsea activities intrinsic to Acorn, while a group comprising Singapore-based LNG9 and GB-Tron will undertake design and engineering work for carbon capture technology on a gas power station at Grangemouth.
LNG9's website noted that its Grangemouth project will include a 2.4 gigawatt gas-fired power station, a floating regasification terminal with a capacity of 5 million tpa, and a hydrogen production plant.
In Glasgow, the University of Strathclyde’s Centre for Energy Policy will investigate the wider economic impacts and opportunities that a CO2 management industry presents for Scotland.
In addition, the Neccus alliance that brings together more than 40 organisations aiming to reduce CO2 emissions, will provide a key link to other work in Scotland, including the various UK government funding plans as well as the Scottish government net-zero roadmap.
Read more
- Power Station podcast | The Future of Hydrogen: Demand and Supply
- September target: Santos set to sanction Moomba CCS project
- Equinor and SSE aim for groundbreaking clean power production in UK
- 'By 2030, blue hydrogen will make little economic sense' versus green, report says
- A combination of small-scale renewables and gas may hold key to Africa's energy crisis
