Italian oil and gas giant Eni believes a proposed HyNet North West scheme that is aiming to decarbonise a large swathe of industry in the north-west of England has all the right ingredients to be selected among the UK’s first carbon capture storage cluster projects.
Several schemes that are hoping to become the UK’s first commercial deployment of carbon capture, usage and storage (CCUS) technology all passed an initial government eligibility test in August to demonstrate they could credibly become operational by the end of the decade.
Later this month, a further round of selection — dubbed Track 1 by the government — will whittle down those contenders to two initial schemes that will receive funding to help them become operational by 2025.
A second stream of projects — Track 2 — will be selected to be operational by 2027.
The UK government has thrown down the gauntlet to the private sector after committing to get at least two CCUS schemes up and running by the mid-2020s and two more by 2030 to capture at least 10 million tonnes per annum of carbon dioxide.
Also in the running are: the DelpHYnus scheme, being proposed by Neptune Energy; the East Coast Cluster, bringing together the BP-led Net Zero Teesside, Equinor-led Zero Carbon Humber schemes and the Northern Endurance Partnership (NEP), also involving Eni, National Grid, Shell and TotalEnergies; the Scottish Cluster, which includes the Acorn project backed by Shell, ExxonMobil, Storegga, Harbour Energy, Macquarie, Ineos, Petrofac and Wood; and the V Net Zero project, led by Harbour Energy.
“We would hope that we are part of the Track 1, which will be announced by government at the end of October,” Philip Hemmens, Eni's senior vice president of Europe and managing director for Liverpool Bay CCS, told Upstream.
Eni is partnered on HyNet by project developers Progressive Energy. The project will involve the construction of blue hydrogen production facilities at Essar Oil’s Stanlow refinery, using technology developed by Johnson Matthey.
A final investment could take place in 2023.
Eni will develop and operate the onshore and offshore infrastructure that will transport and store the climate harming gas produced in the blue hydrogen production process, as well as emissions from other industrial sites in the area.
Eni plans to re-use and repurpose pipelines and platforms in its Liverpool Bay Area, including the Point of Ayr terminal and the large Douglas platform, which has been producing gas since the mid-1990s but is due to cease production by 2023.
The company is looking to store the CO2 in depleted hydrocarbon reservoirs at the Hamilton, Hamilton North and Lennox fields, which currently produce gas via Douglas.
Hemmens said he is confident that at least 50% of Eni's existing pipeline-and-platform infrastructure will be re-used and converted for the purpose of transporting and storing CO2.
This, he noted, will help the timing of the scheme as well as improve its overall economics because its reduces requirements for new greenfield elements to be built and installed.
Existing wells will be abandoned and plugged back before two on each field are sidetracked for use as CO2 injector wells.
This will require the award of a drilling contract for a jack-up rig at some in the future.
“Frankly, I think that [the north-west of England] is one of the best places in the world to get a CCUS project going,” said Hemmens.
“The onshore infrastructure is only 30 kilometres away from where we're going to store the CO2 offshore.
“These are depleted sandstone fields that are well-known and we've been operating them for over 20 years.”
He said the project was "relatively simple and deliverable”, adding it was "demand-led".
If all goes to plan, HyNet will start by storing 3 million tonnes per annum of CO2 from 2025, building up to 4.5 million tpa, which will require the addition of a compressor at the Douglas facilities, before increasing to 10 million tpa by the 2030s.
Hemmens added: "One of the reasons that I regard NyNet as low-risk is we have so many companies wanting to throughput their CO2 into our system that I think we can fill it and keep it full quite sensibly.
"We can really plan it such that we could minimise the transportation and storage fee.
"The other point being because we're spending less capital, because we're reusing equipment than if we had gone out there and had to build everything new. Obviously, there's less money required for the same return."
In October last year the UK Oil & Gas Authority (OGA) awarded Eni a six-year carbon dioxide appraisal and storage licence (CS licence) covering the Liverpool Bay area.
In March the project received a funding commitment of £33 million from UK Research & Innovation (UKRI) through its Industrial Decarbonisation Challenge (IDC) fund. This covers around 50% of the investment to finalise ongoing planning studies .
The UK government is targeting CCUS technology to help it meet its goals of becoming a net zero economy by 2050.
CCUS formed a key pillar of UK Prime Minister Boris Johnson’s so-called 10 Point Plan laid out last year to drive a "green industrial revolution" in the wake of the coronavirus pandemic.