Transocean Top says shelf CO2 storage “fits like a glove for the Norwegian marine industry”. In 2024, the reservoir will be filled with emissions, but the road to profitability could be long.
— It’s not even a sausage at slaughter time — it’s a drop in the ocean, says Bohr Jacobsen, who is leading the investment in CO₂ storage at Northern Lights.
About 100 kilometers west of Bergen, the Transocean Enabler platform drilled a well 2,600 meters below the sea floor. From 2024, it will contribute to storing a small portion of Europe’s emissions.
Inside the rig, Jacobsen talks about the project. The carbon dioxide will be transported by ship to a terminal in Øygarden, before being sent in tubes and stored in tanks under the North Sea floor.
The aurora borealis is an important part of the Langskip project to capture, transport and store carbon dioxide. Total costs are estimated at NOK 25.1 billion, of which the state expects to cover two-thirds.
“We believe CCS’s business fits like a glove for the Norwegian marine industry,” says Transocean Director Knut Vavik.
CCS stands for Carbon Capture and Storage.
“We’re talking about simplifying some of our platforms until they’re optimized for this,” he says.
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Equinor, TotalEnergies and Shell are collaborating on Northern Lights, which plans to develop in two phases.
In the first stage, the estimated storage capacity is 1.5 million tons per year. The potential second stage can reach 5 million tons.
Jacobsen says the company is in negotiations with “a good number of clients” in Norway and internationally. The goal is to get enough agreements for the country to make an investment decision for the second phase of the project.
– We hope to do that at the beginning of next year. It depends on us getting the contracts in place.
Northern Lights recently entered into an agreement with Yara to transport and store 800,000 tons of carbon dioxide annually from an ammonia and fertilizer plant in the Netherlands, starting in 2025.
The company also has agreements with the incineration plants in Norcem and Fortum in Klemetsrud, which together hold 800,000 tons of CO2 per year.
The capacity is filled in the first stage.
– It must be profitable
But according to Patrick Boyani, CEO of Total, achieving profitability that satisfies the owners is never enough.
We know that we have to reach 10-20 million tons per year to achieve a commercially successful project. We are ready to take this risk. He said during the ONS conference in Stavanger that 5 million tons does not give the return that all of our shareholders expect.
Yara and the aurora borealis sign agreement on carbon transport and storage
When asked about the Total Director’s ratings, Jacobsen said the following:
We rely on the fact that it must be a commercial enterprise. It must be profitable. Then you talk about five to six million tons.
– We offer this as a service. And as far as I know, we’re the only ones who do, and we’re trying to make it a business.
Currently, the project is completely dependent on government support. Oil and Energy Minister Terje Asland described CO₂ storage as a “new industrial plant to stand on”.
Why should the state take the bulk of the bill and thus also take the risk?
– Because this is a project we believe in. It is about reducing greenhouse gas emissions in industry and difficult regions to replace fossil energy.
“Customers have to choose whether they want to store CO₂ and pay for that service, or whether they release it,” Jacobsen says.
For most people, it pays to go out, but it also comes down to how many free quotas they have.
Today, the industry receives a share of the emissions quotas without having to pay, but it is being phased out, Jacobsen says.
CO₂ price break
In its most recent annual report, Northern Lights notes that the rising price of carbon dioxide is an important factor for the company to be able to expand its operations.
The EU allowances trading system is supposed to pressure companies to take action and cut emissions, but there has been a long excess of allowances, and prices have been at very low levels.
That changed and the price rose sharply. But since August, the price of the carbon dioxide allowance has fallen sharply, from around €100 per ton to less than €70 per ton.
– It crashed recently, says Clarksons’ head of analysis Turner Holm.
One of the reasons, he believes, is that the European Union will sell carbon dioxide allocations for 20 billion euros in the market to help finance the energy plan called “RePower EU”.
“I think the price collapse we’re seeing now is probably temporary because of the sales program to the European Union,” adds Holm.
Equinor and Wintershall Dea will collaborate to store CO2 on the Norwegian continental shelf
According to the head of the analysis department, one of the biggest challenges is finding space to store carbon dioxide.
A million and a half tons is nothing. In Europe, the carbon price system covers 1.6 billion tons of emissions. This represents only 40 percent of emissions in the European Union. The northern lights represent 0.01 percent of the entire system, which in turn accounts for 40 percent of all emissions.
There will always be a small degree of uncertainty. Because we didn’t start with the injections. But now we’re getting good results on that as well, so we’re reasonably confident, says Jacobsen, CEO of Northern Lights.
If the next development phase is approved, three new wells will be required. Its capacity will increase to between five and seven million tons annually.
– We have a lot of space here. We are reasonably confident that there is sufficient subsurface capacity to take up CO2 from stage 1 and stage 2.
Jacobsen says the company sees a need for carbon capture and storage at about 300 million tons per year, based on estimates from consultancy Rystad Energy.
– The challenge is to qualify the inventory, that is, to do exactly the work that we did in the aurora borealis. There is a bit of artwork that needs to be done. We think this will be a bottleneck.
– It’s expensive and time-consuming, he says.
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