Shell and Norwegian oil company Statoil have agreed to work together on the world’s biggest carbon sequestration project. The proposed scheme would pump 2 to 2.5 million tonnes of carbon dioxide (CO2) produced by a 860 MW gas-fired power plant at Tjeldbergodden in Norway to two offshore oil and gas fields in the Norwegian section of the North Sea (at Draugen and Heidrun). The scheme, which is expected to commence in 2010, would also increase oil recovery in these two fields.
This announcement follows an agreement between the UK and Norwegian Governments in November 2005 to cooperate on projects to inject and permanently store CO2 beneath the North Sea. According to the UK Energy Minister, Malcolm Wicks, carbon sequestration could potentially cut the level of CO2 emissions from power stations by up to 90%.
The cost of the project is estimated at $1.2 to $1.5 billion and is reported to be dependent on substantial government funding, in particular from the Norwegian Government.
The scheme will be of interest to companies and entities active in the North Sea and in other parts of the world as, if the scheme is successful and financially viable, it is likely to become a model for similar schemes. Further, the European Commission considered in its recent Green Paper for a European Strategy for Sustainable, Competitive and Secure Energy that carbon sequestration, in combination with clean fossil fuel technologies, could provide an opportunity to develop near zero emission technology. The Commission recognised that to be successful, carbon sequestration schemes would have to be accompanied with enough stimulus in order to create the necessary economic incentives, legal certainty and environmental integrity.
Depending on their viability, carbon sequestration schemes might in future also give rise to emission reduction credits tradable under the European Union’s Emission Trading Scheme or the Kyoto Protocol, making the scheme of wider interest to the Energy and Renewables industry generally. The scheme will also be of interest as the implementation of such projects in the UK section of the North Sea could also have the effect of increasing and prolonging oil recovery in several decaying oil fields.
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The original publication date for this article was 14/03/2006.
