The Dutch government has granted around €2 billion ($2.43 billion) in subsidies for a giant carbon capture and storage (CCS) project in the Dutch sector of the North Sea, involving oil and gas supermajors Shell and ExxonMobil.
Shell and ExxonMobil, in a consortium also including Air Liquide and Air Products, registered for the subsidies from The Hague in January — via the SDE++ scheme — and it was reported over the weekend they would have their applications granted.
The subsidies will be directed towards their involvement in Porthos, a project that will see about 2.5 million tonnes per annum of carbon dioxide from industry in the Port of Rotterdam stored in depleted reservoirs at a gas field in the North Sea.
The subsidies will be granted over a 15-year period, over which time Porthos is anticipated to store more than 37 million tonnes of CO2.
A spokesperson for Porthos told Upstream the Dutch government would help bridge the gap in costs between the European Union Emissions Trading Scheme (ETS) and the costs of CCS via the subsidies.
"The subsidy scheme is structured in such a way that the government annually only pays out the actual difference between the ETS and the costs of CCS as a subsidy," she said.
"The ETS price is likely to increase, and so the amount of subsidy will probably decrease. With the subsidy, companies can decrease their CO2 emissions, but will not experience a competitive disadvantage compared to their international competitors."
'Biggest Dutch project for CO2 reduction'
A Shell spokesperson told Upstream on Monday: “Porthos will be the biggest Dutch project for CO2 reduction and could make a significant contribution to meeting the Dutch climate accord."
They added: “It aims to capture up to 2.5 million tonnes of CO2 per year from 2024, including helping to decarbonise the Pernis refinery, which continues to provide products to keep the Netherlands moving."
A final investment decision by the Porthos-consortium is planned for next year," the Shell spokesperson added.
According to Porthos, approximately 15% of CO2 emissions in the Netherlands take place in the Rotterdam port area.
The Dutch government is currently aiming to reduce its greenhouse gas emissions by 49% by 2030, compared to 1990 levels, and a 95% by 2050.
Shell, ExxonMobil, Air Liquide and Air Products signed an agreement with the Porthos project organisation — consisting of EBN, Gasunie and the Port of Rotterdam Authority — in 2019 to capture the CO2 for the project.
The four companies are expected this year to prepare for the construction of the capture plants, while the Porthos project organisation will carry out technical preparations for laying pipes on land and on the sea bed, building the compressor station, and adjusting the platform at sea.
Shell, ExxonMobil, Air Liquide and Air Products will capture the CO2 and supply it to a collective pipeline that runs about 30 kilometres through the Rotterdam port area, where it will then be pressurised in a compressor station at Maasvlakte.
The CO2 will then be transported via pipeline, roughly 20 kilometres, to the offshore P18-A platform at a depleted North Sea gas field, where it will then be pumped into a sealed reservoir of porous sandstone, more than three kilometres beneath the sea bed.
As well as storing the CO2 underground, Porthos is also examining other options to utilise the captured CO2, with the infrastructure also to be suitable for transporting CO2 for use by industry, if there is demand in the future.
According to Porthos, a relatively small amount of CO2 from Rotterdam industry is already being used for greenhouse horticulture in the Dutch province of South Holland, where it enables plants to grow faster.