Equinor moves ahead with CCS
Funding decision granted and first contracts signed for the Northern Lights project
Summary - Following a historic vote in parliament on December 15th 2020, the Norwegian Government announced its funding decision for the ‘Northern Lights’ CO2 transport and storage project. In cooperation with Shell and Total, the project aims to create a carbon capture and storage hub (or ‘sink’) in Norway, open to third parties. It will be the first ever cross-border, open-source CO2 transport and storage infrastructure network and offers European industrial emitters the opportunity to store their CO2 safely and permanently underground. A deal for the construction of the facilities has been struck between Equinor, Subsea 7 Norway and Aibel, paving the way for the facilities to be operational in 2024.
Northern Lights will be the first of its kind – accessible infrastructure for all to enable transport of CO2 from industrial sites to a terminal in Øygarden, from where it is transported by pipeline for permanent storage in a reservoir 2600 meters under the seabed.
Initially, Northern Lights includes capacity to store up to 1.5 million tonnes of CO2 per year. Plans exist to increase the capacity to 5 million tonnes per year through additional phases of development and an increasing customer base.
Equinor, Shell and Total made a conditional investment decision on Northern Lights in May 2020. The project partners are now in the process of establishing a Joint Venture, (subject to merger clearance).
All signs are ‘Green for Go’
Where some are struggling to get carbon capture projects started, others are paving the way.
Following a historic vote in parliament on December 15th 2020, the Norwegian Government announced its funding decision for the Northern Lights CO2 transport and storage project. The funding decision demonstrates the Norwegian government's strong support for the development of a Carbon Capture and Storage (CCS) value chain, which some claim is essential if Europe is to achieve its carbon neutrality targets. Considering the fact that the carbon clock is ticking, the pressure is on to realize the project for its 2024 deadline.
With paperwork done, construction can commence
Subsea 7 has won an EPCI (engineering, procurement, construction and installation) contract for pipelaying and subsea installations. The contract value is estimated at about NOK 500 million. Subsea 7 will fabricate and lay a 100 km long pipeline that will transport CO2 from the intermediate storage site at Energiparken in Øygarden to the injection well in the North Sea. Subsea 7 will also install a 36 km long umbilical that will connect the injection well to the Oseberg field from which the subsea injection facilities will be operated.
Project management and engineering will be delivered by Subsea 7’s office at Forus, while fabrication of pipes will be done at the Vigra spool base near Ålesund. The contract is expected to result in approximately 250 man-years during the project’s life. Planning of the work will start immediately, and the main offshore operations are scheduled to be carried out during 2022-2023.
Aibel has been awarded an EPCI contract for the Northern Lights subsea control system located on the Oseberg A platform. The contract is awarded as a call-off against the existing Oseberg portfolio agreement signed in July 2020. The estimated value of the assignment is about NOK 140 million. The scope of work includes all necessary upgrades on the Oseberg A platform to pull in and operate the umbilical system that will connect the platform and the Northern Lights subsea facilities.
“The new contracts in the Northern Lights project will create important activity for the supplier industry. Most contracts are now in place, and we look forward to working together with the selected suppliers to realise this pioneering project,” says Peggy Krantz-Underland, Equinor’s chief procurement officer.
Site preparation for the Northern Lights project started on 4 January. Most contracts are now in place to realise this pioneering project.
Why is Northern Lights such a big deal?
Some argue that carbon capture and storage (CCS) is simply a way for the fossil fuel industry to keep doing what they do, which feels wrong. Environmentalist claim CCS does not change underlying fundamental issues associated with fossil fuels. A saying in Dutch aptly describes CCS as “mopping the floor with the faucet running”, in other words it’s a band-aid solution and not forcing oil and gas majors to undergo a transition.
Though that argument has merit, it cannot be disputed that carbon capture and storage can create a significant, lasting impact which we can start with today. It is a proven technology, used for decades, that can become a valuable tool in the battle against climate change. Norwegian Minister of Petroleum and Energy, Tina Bru, explains that “carbon capture and storage is important to achieve the goals of the Paris Agreement. "Longship" is the largest climate project ever in the Norwegian industry and will contribute substantially to the development of CCS as an efficient mitigation measure. Working together with the industry, the step-by-step approach has confirmed that the project is feasible. I want to thank the Northern Lights partners Equinor, Shell and Total - and I am looking forward to our continued cooperation.”
The Northern Lights project is part of a larger Norwegian project called “Langskip” (Longship), supported by the Norwegian government. It includes the development and operation of CO2 transport and storage facilities, open to third parties. It will be the first ever cross-border, open-source CO2 transport and storage infrastructure network and offers European industrial emitters the opportunity to store their CO2 safely and permanently underground. Providing the infrastructure to safely and reliably store carbon offshore for the entire North Sea area is a great opportunity for many. Even Microsoft has shown interest in the project, as it can help with their carbon negative goal.
The Northern Lights project is a pretty big deal, as it paves the way for carbon capture and storage of industrial resources starting in 2024. This could mean a significant (and much needed) reduction in carbon emissions by some of the largest polluters.
(Some of) the people behind Northern Lights
“The Northern Lights project is the first of its kind offering a solution to cut emissions from industrial sources in Norway and Europe. Work has started at the site and with these two important contracts in place, we are ensuring that the project progresses according to plan in order to deliver a key part of the important Longship project,” says Sverre Overå, project director of Northern Lights.”
“The new contracts in the Northern Lights project will create important activity for the supplier industry. With most contracts in place, we look forward to working together with the suppliers to realise this pioneering project.”
“Carbon capture and storage (CCS) is important to achieve the goals of the Paris Agreement. “Longship” is the largest climate project ever in the Norwegian industry and will contribute substantially to the development of CCS as an efficient mitigation measure. Working together with the industry, the step-by-step approach has confirmed that the project is feasible. I want to thank the Northern Lights partners Equinor, Shell and Total - and I am looking forward to our continued cooperation”
“Northern Lights is a true pioneering project and the first of its kind offering a solution to cut emissions from industrial sources in Norway and Europe. We are ready to start realising this project that will be an important part of the climate solution. I want to thank the Norwegian government and for the broad political support in making this a reality. I am certain that we together with our partners and suppliers will make this project a success.”
“The Norwegian government’s initiative and support for what will be the world’s first open source CO2, transport and storage project shows real vision and commitment. Northern Lights is designed to provide a service to industrial emitters who can now take action on emissions that can’t be avoided. This is key to bringing real progress towards tackling climate change. Shell will play our part in making this a reality.”
“The development of the carbon capture and sequestration value chain is essential to decarbonize Europe’s industries. We are a long-standing partner of Norway, a pioneer country which has more than 20 years of experience in CCS, and today we thank its government for making possible the final investment decision to develop Northern Lights. CCS is key to achieving carbon neutrality in Europe and is fully part of our Climate Ambition to get to net zero emissions by 2050.”
References & Further Reading
Mr. Sustainability - Insights on CCS
Equinor - Northern Lights CCS
Equinor - Important contracts in place in the Northern Lights project
Equinor - Go-ahead for the Northern Lights project
Equinor - Equinor collaborates with Microsoft on Northern Lights carbon capture and storage value chain
Microsoft - Microsoft will be carbon negative by 2030