Two consortiums with majority state-owned Equinor ASA have won two new exploration licenses for carbon dioxide (CO2) storage on the Norwegian side of the North Sea.
Equinor and London-based Harbour Energy PLC together won a permit straddling blocks 15/8, 15/9, 15/11 and 15/12. The permit, EXL012, lasts four years with three phases. Harbour Energy Norge AS holds a 60 percent stake as operator while Equinor Low Carbon Solution AS has 40 percent, according to the work program published online by the Norwegian Offshore Directorate.
EXL013 went to a 50-50 venture between Equinor Low Carbon Solution as operator and Aker BP ASA, also a local company. The four-year, three-phase permit covers blocks 25/1 and 30/10.
The firms are to conduct studies and, in phase 3, come up with a development plan and a final investment decision, according to the work program.
“The permits are offered with a binding work program, with built-in milestones to ensure efficient progress, or relinquishment of the acreage if the licensees do not complete the storage project”, the Energy Ministry said in a statement on its website announcing the new awards.
Energy Minister Terje Aasland said, “Norway has a unique opportunity to take a leading role in large-scale commercial CO2 storage in Europe”.
The Norwegian continental shelf holds a theoretical CO2 storage capacity of 80 billion metric tons, which represents about 1,600 years of Norwegian CO2 emissions at current levels, according to a statement by the Energy Ministry April 30.
“The government is committed to making CO2 storage a profitable and sustainable industry in Norway”, Aasland said. “Today’s awards are an important step in ensuring that the entire value chain is in place, so that our ambitious plans can be realized”.
The awards were for three areas announced June 6, for which six companies submitted proposals. The three winners edged out Horisont Energi AS, Storegga Norge AS and TotalEnergies EP Norge AS.
“A number of players in the industry have shown interest in new storage areas”, Aasland added. “This makes me optimistic about further progress in the work to make CO2 storage part of the solution to the world’s climate challenge”.
Earlier this year Equinor and two consortiums were awarded four CO2 storage exploration permits in the Norwegian North Sea. Equinor bagged two. The other two went to a group comprising Lime Petroleum AS, OMV (Norge) AS and Var Energi ASA, and another consortium consisting of Aker BP ASA and PGNiG Upstream Norway AS, as announced by the ministry June 20. The awards were for an invitation made March 6.
Licensing for CO2 storage is part of Norwegian regulations passed December 2014 to support CO2 storage as a means to mitigate climate change. An exploration permit grants “an exclusive right to exploration with a view toward assessing the potential for exploitation of a subsea reservoir for storage of CO2”, per the official text of the regulations.
“The award of exploration licenses will normally be done with a work program including one binding phase and subsequent conditional phases with decision points for the continuation or relinquishment”, the Energy Ministry says. “Relinquishing allows other stakeholders with storage needs to apply for awards of the area.
“The work program will normally end with a demand that the companies make an investment decision on the realization of CO2 a storage, and that they then submit a plan for development and operation for the storage location or relinquish of the area”.
