Funding Falls Into Place for Carbon Capture

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Public funding is starting to fall into place for European carbon capture and storage (CCS) projects. This past week, the Dutch government pledged €2 billion ($2.4 billion) in subsidies to support the Porthos scheme, which involves Royal Dutch Shell, Exxon Mobil and others (IOD May10'21). Across the continent, three substantial projects -- Porthos in the Netherlands, Longship/Northern Lights in Norway, and Acorn in the UK -- could be operational by 2024. Open Access The Porthos project in the Port of Rotterdam could make a significant contribution to meeting the Netherlands' goal of a 49% reduction in greenhouse gas emissions from 1990 levels by 2030 and 95% by 2050. Led by three public-sector companies -- EBN, Gasunie and the Port of Rotterdam -- the project will provide an open access carbon dioxide transport and storage system that will serve customers in the port area. The port area -- home to several oil refineries and other industrial facilities -- generated 22.4 million tons of carbon dioxide in 2020, about 13.5% of the Netherlands’ annual emissions. CO2 will initially come from four customers -- Shell, Exxon, Air Liquide and Air Products & Chemicals. Porthos and the four launch customers are expected to ink transport and storage contracts by the summer of 2021, with a final investment decision planned for early 2022. First Phase Initially, the project aims to sequester up to 2.5 million tons of CO2 a year from 2024 by storing it in depleted gas fields under the North Sea. The project will help decarbonize Shell's refinery and Exxon's refinery and petrochemical complex in the Rotterdam area. This first phase will focus on development of CO2 transport and storage infrastructure in the Rotterdam area. Plans call for development of a 30 kilometer onshore pipeline system, a compressor station, and a 20 km offshore pipeline to the depleted P18 gas field, where the CO2 will be stored. Front-end engineering and design studies are almost complete. A subsequent phase may involve construction of pipeline connections to other ports/industrial sites in the Netherlands and Belgium -- all large industrial areas with high CO2 emissions. An EU "project of common interest" has been set up to develop the concept. Hubs and Clusters Hub and cluster projects for carbon capture and storage are being developed in Europe as a way to share the costs of putting the necessary infrastructure in place (NE May28'20). Late last year, the Norwegian government pledged $1.2 billion in funding for Northern Lights -- the transport and storage component of the Longship CCS project. That followed a final investment decision by a joint venture made up of Equinor, Shell and Total, which have committed to jointly invest $680 million in the project. Northern Lights Phase 1, with a capacity to capture and store up to 1.5 million tons/yr of CO2, should be completed by mid-2024. A potential second phase could see this expanded to 5 million tons/yr. From Acorn to Mighty Oak? The UK government has earmarked £1 billion ($1.4 billion) of funding for four CCS clusters -- two by the mid-2020s and another two by 2030 -- potentially in areas such as Humberside, Teesside, Merseyside, Grangemouth and Port Talbot. Acorn in Scotland is said to be one of the most mature UK CCS and hydrogen projects and is also positioned to become the most cost-effective and scalable CCS project in the UK. Now led by Storegga, Shell and Harbour Energy after Total dropped out, Acorn is in the detailed engineering and design phase of development and could be operational by 2024. The project is expected to store at least 5 million tons/yr of CO2 from the St. Fergus gas processing complex near Aberdeen in offshore gas reservoirs by 2030 -- half the target set out in the UK government's 10 Point Plan. Exxon is in talks to join Acorn and also recently proposed what would be the world's biggest CCS hub along the Houston Ship Channel in the US Gulf Coast region (EIF Apr.28'21). In addition to its involvement in planned projects in Europe, Shell -- alongside Canadian Natural Resources and Chevron -- is also a co-owner of the Quest CCS facility, which has been operational since 2015. Deb Kelly, London

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