Eni has trained its sights on increased carbon capture and storage (CCS) opportunities in Europe as the Italian energy giant also earmarked €1 billion ($1.2 billion)-worth of non-core upstream asset sales by the end of this year.
“CCS is a key pillar of our decarbonisation strategy and can also reinforce the role of gas as a partner for renewables," chief financial officer Francesco Gattei said on a conference call following the company's third-quarter results announcement, which showed a net loss.
"We have already identified two hubs in southern and northern Europe,” he said following the first set of results from the company since it unveiled a new company structure.
The Natural Resources wing will focus on developing the upstream oil and gas portfolio while also promoting energy efficiency and carbon capture.
The Energy Evolution wing will support the company’s power generation, product transformation and marketing.
Italian project to the fore
One of Eni’s major planned projects is the Adriatic Blue CCS project off Ravenna, Italy. This project will be the first CCS projects in the Mediterranean region, with demonstration start-up expected in 2022 and full start-up in 2026.
So far, Eni has disclosed few details about the proposed project, which aims to use exhausted natural gas fields.
“With a storage capacity of between 300 and 500 million tonnes, these underground deposits could make a very significant contribution to the containment of climate-changing gas emissions in Italy,” Gattei said.
“And Ravenna, with its industrial set-up and still operating infrastructure, offers a unique opportunity for CCS, since reusing existing plants and its proximity to emission plants will allow costs to be kept highly competitive."
Active in the UK
Eni is also working to develop a pair of CCS projects in the UK, where earlier this month, it was awarded a carbon dioxide appraisal and storage licence (CS licence) for a project that is expected to re-use and repurpose depleted hydrocarbon reservoirs in the East Irish Sea.
The six-year licence will cover an area located within the Liverpool Bay area. Eni will conduct feasibility studies — including front-end engineering and design — aiming to reach a final investment decision by 2023, and start-up by 2025, Gattei said.
The other project is the BP-operated Net Zero Teesside carbon capture storage and utilisation (CCUS) project in northern England, where start-up is expected by 2025.
Eni is a minority partner in Teesside, together with Norway’s Equinor, France’s Total and Anglo-Dutch supermajor Shell.
Selling non-core upstream assets
To finance its transition ambitions, Eni aims to strengthen its balance sheet by disposing of some exploration and production assets.
“We will dispose of non-core upstream assets which no longer fit in our portfolio and pursue the optimisation of our non-upstream portfolio, including the infrastructure and logistics assets,” Gattei said.
“We will also consider replicating the model where we merge our assets with another company to create a dedicated independent entity able grow and compete.
“Thanks to this activity we are working on the disposal of around €1 billion by the end of the year,” Gattei said.
“Negotiations are in very advanced stages. (We are referring to) assets in Australia but also other assets are in discussions... We have to move our portfolio away from non-core areas and towards growing opportunities in the transition business,” he added.