The oil and gas supermajor joint venture behind the Northern Lights carbon capture and storage (CCS) project in Norway has signed a commercial agreement to transport up to 800,000 tonnes per annum of carbon dioxide from the Yara Sluiskil ammonia and fertiliser plant in the Netherlands, a deal the companies described as the first of its kind.

Starting in early 2025, the CO2 will be captured, compressed and liquefied in the Netherlands and transported by vessels to the Northern Lights terminal, where the liquefied CO2 will be stored in subsurface formations about 2600 metres under the seabed off the coast of Oygarden.

“I think it’s hard to understate the significance of this milestone,” Shell chief executive Ben van Beurden told reporters at the ONS conference in Stavanger, Norway, on Monday.

“The key thing is that we have actually delivered on the vision of this project, which is to have an international cross-border collaboration where supply and demand for CO2... are being brought together in a new business model,” Van Beurden said.

The Northern Lights project is a venture between France’s TotalEnergies, Equinor of Norway and UK-headquartered Shell, which hold equal shares in the CCS project.

The Yara agreement will bring the first phase of Northern Lights to full capacity, with CO2 for storage also coming from the Norwegian government’s Longship CCS project. The initial phase is designed to store 1.5 million tonnes per annumof CO2 starting in 2024 and is 80% funded by the Norwegian government.

A second phase, which has yet to be approved, will expand capacity to more than 5 million tpa and by design will largely be commercially funded.

Officials did not reveal commercial terms for the Yara agreement but said, if successful, the deal could pave the way for the final investment decision on the second phase.

Van Beurden called Northern Lights “a pathfinder project now for similar CCS projects” including the second phase of Northern Lights.

TotalEnergies chief executive Patrick Pouyanne said the Yara deal will almost certainly lead to a second-phase final investment decision.

“I am sure the results will be positive,” he said, adding that the company expects to invest in projects that will provide far more storage capacity than the 5 million tpa of Northern Lights.

“We need to target 10 [million] to 20 million tonnes. We are ready to take the risk,” he said.

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