Marine Link
Tuesday, July 16, 2024

Equinor Awarded CO2 Storage licenses in North Sea

Maritime Activity Reports, Inc.

June 20, 2024

Source: Equinor

Source: Equinor

Equinor has been awarded the operatorship for the development of two new CO2 storages in the North Sea along with a 100% share for the two licenses, Albondigas and Kinno.

The new licenses are each expected to have the capacity to store around 5 million tons of CO2 per year when in operation. This estimate will be further determined in the exploration phase.

Equinor expects 4-8% real base project returns for its early phase CO2 storage business, and further value uplift potential when commercial markets are developed.

The award of the Albondigas and Kinno licenses adds to Equinor’s ambitions to develop more storage licenses in the North Sea in the coming years.

Equinor is maturing a ship-based solution as well as a large pipeline to connect industrial emissions in Europe with storage opportunities at the Norwegian Continental Shelf. The planned pipeline named CO2 Highway Europe will have capacity to transport 25-35 million tons of CO2 per year from Belgium and France.

The Smeaheia storage license, awarded to Equinor in 2022, is the anchor storage for this pipeline development and Albondigas and Kinno will be additional storage opportunities that can be connected.

Equinor is also about to complete the first phase of the Northern Lights CO2 transport and storage facility together with Shell and Total Energies. It will be ready to receive CO2 by the second half of this year.

Equinor has also been awarded its first CCS exploration permit in Denmark as operator, together with partners Ørsted and Nordsøfonden. The partnership will start surveys to assess if the onshore license in the North West Zealand can be developed into a safe CO2 storage facility.

The partners are permit holders for the project named CO2 Storage Kalundborg, with a reservoir approximately 1,400 meters below ground, and with a potential capacity to store up to 12 million tons of CO2 per year.

If the partnership over the next years successfully develops the permit into a CO2 storage facility approved by the Danish authorities, it could start storage of CO2 at the end of this decade.

Equinor holds a 60% share in the awarded exploration license, with partner Ørsted having a 20% stake, and the Danish state participating through Nordsøfonden with a 20% equity.

The awarded license is in the vicinity of Ørsted’s established shipping and storage terminal Ørsted Kalundborg CO2 hub. Here the Danish energy company is constructing a CO2 capture facility at the Asnæs Power Plant, which is set to become operational from the beginning of 2026, with CO2 ship export to the Northern Lights storage facility in Norway. Ørsted’s terminal with its strategic position and scale will be a key component for reception and transport of CO2 to the potential CO2 storage facility the partnership will explore.

Gaining access to more CO2 storage capacity aligns with Equinor’s ambition of having 30 to 50 million tons of CO2 transport and storage capacity per year by 2035.