Europe Energy Review

New hydrocarbon discoveries and project start-ups offshore Norway, opportunities to power offshore oil and gas platforms with wind power generation, and a number of projects and government awards in wind, solar, carbon capture, and green hydrogen marked the European energy scene this past month.

Oil & Gas

Norway’s Ministry of Petroleum and Energy announced the tender for the Awards in predefined areas (APA) 2023 on 10 May, encompassing the predefined areas with blocks in the Norwegian Sea, Norwegian Sea, and Barents Sea. Since the tender in 2022, the predefined areas (APA acreage) have been expanded by 78 blocks in the Barents Sea and 14 blocks in the Norwegian Sea. The deadline to apply for APA 2023 is 23 August 2023, while awards are expected during the first quarter of 2024.

Equinor made a gas and condensate discovery near the Kristin field in the Norwegian Sea, but the primary exploration target for the wildcat well was to prove petroleum in Middle and Lower Jurassic reservoir rocks. Preliminary estimates place the size of the discovery in the Garn Formation between 0.2 and 1.1 million Sm3 of recoverable oil equivalent. The licensees will assess the discovery alongside other nearby discoveries/prospects, as regards further follow-up, the Norwegian Petroleum Directorate said.

In the middle of May, Equinor officially opened the Njord field, which had undergone extensive upgrades in the past years. Following the upgrades on the platform and the floating storage and offloading vessel (FSO), they are now ready for doubling the field life – and more than doubling production, the Norwegian energy giant said.

The Njord field started production in 1997 and was originally supposed to produce until 2013. Work with increased recovery means that there are still large volumes of oil and gas left, while new discoveries in the area can also be produced and exported via Njord. The field is now ready to produce and export oil and gas for another 20 years.

Neptune Energy and its partners, Vår Energi, Sval Energi, and DNO, began production from the Fenja oil and gas field in the Norwegian Sea. Fenja is expected to produce 35,000 barrels of oil equivalent per day (boepd, gross), via two oil producers, with pressure support from one water injector and one gas injector. Total reserves at the field are estimated between 50 and 75 million boe, of which 75 percent is oil and 25 percent is gas.

Neptune Energy has also awarded a more-than-$100 million contract to Tenaris to provide equipment and services to support drilling activities on the Norwegian Continental Shelf. The contract covers the manufacture, transport, handling, and repair of a broad range of casing materials used in offshore drilling activities. Initially this will include support for one exploration well and one appraisal well in the Neptune-operated Gjøa area in the Norwegian Sea in 2023. The five-year contract has two two-year extension options.

Subsea7 was awarded a major contract by Turkish Petroleum for the second phase of the Sakarya gas field development offshore Turkey in the Black Sea. Subsea7 defines a major contract as being one where Subsea7’s share of revenue over $750 million. The contract is awarded to a consortium including Subsea7 and its partner in Subsea Integration Alliance, OneSubsea, as well as SLB and Saipem. The integrated project scope of the engineering, procurement, construction, and installation (EPCI) contract will cover the subsurface solutions including subsea production systems (SPS), subsea umbilicals and flowlines (SURF). Offshore activities are expected between Q2 2025 and Q3 2025, with optional scope between Q4 2026 and Q4 2027 subject to final investment decision by the client, Subsea7 said.

Low-Carbon Energy

Hywind Tampen, the world’s first project to deliver renewable power for offshore oil and gas, is already delivering power to the Snorre field, Equinor said in mid-May. This is a great milestone for the world’s largest floating offshore wind park, following first power to the Gullfaks field in 2022, the Norwegian firm said.

Another oil and gas operator offshore Norway, Vår Energi, has entered into a collaboration with Odfjell Oceanwind and Source Galileo to pursue a pilot project, GoliatVind, for floating offshore wind at the Goliat platform.

In a setback for a similar project, Equinor said on 22 May it would postpone a further development of the Trollvind offshore wind initiative indefinitely, due to rising costs and a strained timetable to deliver on the original concept.

“Trollvind was a bold industrial plan to solve pressing issues concerning electrification of oil and gas installations, bringing much needed power to the Bergen-area, while accelerating floating offshore wind power in Norway. Unfortunately, we no longer see a way forward to deliver on our original concept of having an operational wind farm well before 2030,” said Siri Espedal Kindem, vice president of renewables Norway.

In the UK, the North Sea Transition Authority (NSTA) offered for awards 20 carbon storage licences at offshore sites, including some near Aberdeen, Teesside, Liverpool, and Lincolnshire.

Once the new storage sites are in operation, they could make a significant contribution to the aim of storing up to 30 million tonnes of carbon dioxide (CO2) per year by 2030, approximately 10 percent of total UK annual emissions, NSTA said.

Land will be the crucial resource in the European Union’s energy transition, McKinsey & Company said in a report in May.

The amount of land required to meet the wind and solar PV capacity targets in Europe is significant. For example, in France, Germany, and Italy, where roughly 50 percent of the EU renewable energy sources (RES) installations are expected, meeting 2040 RES capacity targets would require an additional 23,000 to 35,000 square kilometers of land—an area equivalent to the size of Belgium, McKinsey’s analysts say. In addition, land will be needed to serve as a source of biogenic CO2 for bioenergy with carbon capture and storage and the production of e-fuels.

On top of that, technical, regulatory, and environmental constraints often reduce the amount of land available for RES development.

“Technical limits include existing RES installations and areas with limited natural wind or sun intensity. And regulatory and environmental limitations, which acknowledge local communities’ concerns about land use, can reduce the land available for RES development,” according to McKinsey.

A report from RenewableUK in early May urged the UK Government to work closely with the domestic green hydrogen industry to implement new policies to enable the UK to accelerate the rate at which it builds major projects as fast as possible.

“If the UK does not step up, it risks being left behind due to ambitious tax incentives and subsidies offered abroad, such as the United States Inflation Reduction Act, which may attract investment and prospective suppliers away from this country,” RenewableUK noted.

In company news, Cerulean Winds and partner Frontier Power International plan to build the North Sea Renewables Grid (NSRG), an offshore integrated green power and transmission system, powered by floating wind, that oil and gas platforms will plug into for clean power. Cerulean and Frontier Power International will develop three sites of hundreds of floating turbines, producing multiple GW of electricity, after being offered the lion’s share of seabed leases in the recent Crown Estate Scotland INTOG round.

Nova and consortium partners The University of Strathclyde, Shetland Islands Council, and Ricardo Energy have been awarded funding from the Scottish Government’s Emerging Energy Technologies Fund – Hydrogen Innovation Scheme for their Green Hydrogen and Oxygen Supply from Tidal Energy (GHOST) project. GHOST will look at the potential of producing green hydrogen and oxygen from Nova's tidal energy projects in Shetland.

TGS, a provider of energy data and intelligence, on 23 May announced the start of Norway’s first-ever LiDAR buoy measurement campaign to support offshore wind development. The first floating LiDAR buoy will be deployed in the Utsira-Nord zone and conduct wind, metocean, and environmental measurements to enhance decision-making for the three floating wind project areas to be awarded in Norway’s first floating wind lease round.

Repsol will develop renewable projects in Italy totalling 1,768 MW, the Spanish energy group said in mid-May. Repsol has a portfolio in the country that, once fully operational, will add 943 MW of wind and 825 MW of photovoltaic solar projects to the company's portfolio of renewable projects. More than 60 percent of the projects in Italy are at an advanced stage of development.

Aker Carbon Capture has been awarded a large-scale carbon capture project by Ørsted, a global leader in renewable energy, for the Ørsted Kalundborg Hub in Denmark. As the carbon capture provider, Aker Carbon Capture will deliver five Just Catch units, additional equipment such as liquefaction systems, and temporary CO2 storage and on-/offloading facilities. The carbon capture facilities will have an installed design capture capacity of 500,000 tonnes CO2 per year.

Aker Carbon Capture’s project award follows the 20-year contract award to Ørsted by the Danish Energy Agency (DEA) for its carbon capture and storage (CCS) project.

Irish wave energy developer OceanEnergy has signed up to demonstrate its OE35 floating wave energy converter at the European Marine Energy Centre (EMEC) in Orkney, Scotland. OceanEnergy intends to demonstrate the OE35 over two winter periods from 2024 at EMEC’s Billia Croo wave energy test site off the west coast of Orkney.

Germany-based specialist for water electrolysis, thyssenkrupp nucera, and Swedish industrial start-up H2 Green Steel have entered into an agreement to develop one of the world’s largest electrolysis plants. The deal secures capacity of more than 700 MW for H2 Green Steel’s electrolysis plant in Boden – making it one of the world’s largest electrolysis plants announced to date. The agreement with thyssenkrupp nucera will cover alkaline water electrolysis technology (AWE) and large-scale electrolysis plant engineering.

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