Danish govt bankrolls two projects for CO2 storage in North Sea

Denmark’s government has approved funding totalling about $41 million for two carbon capture and storage (CCS) projects, which will use the existing oil and gas infrastructure in the North Sea, all with a goal to support the country’s wider CO2 emission reduction targets for 2030 and beyond.

Danish Energy Agency, a part of the Ministry of Energy, Utilities and Climate, revealed on Wednesday it had granted funds to two different CCS projects, the Ineos-led Greensand and the Bifrost project, led by the Danish Underground Consortium, which is operated by TotalEnergies.

The first project, for the storage in the Ineos-operated Siri area, was awarded funding of DKK 197 million (about $29.9 million) and the second one, for the storage in the Harald field, funding of DKK 75 million (about 11.4 million).

Danish North Sea  - Danish Energy Agency
Danish North Sea fields, including the fields operated by TotalEnergies (yellow) and INEOS (orange/red). Source: Danish Energy Agency

According to the government, the projects will begin in 2022 and will potentially have a total storage potential of as much as 24 million tons of CO2 per year.

Danish Minister of Climate and Energy and Public Utilities, Dan Jørgensen, pointed out that projects like these are the turning point for a switch from black to green, adding that it is time to put an end date to oil exploration. Denmark has already revealed its decision to cancel all future licensing rounds for new oil and gas exploration and production permits in the Danish part of the North Sea and end existing production by 2050.

Denmark has also recently joined the Beyond Oil & Gas Alliance (BOGA), launched during the COP26 summit in Glasgow, which will seek to deliver a managed and just transition away from oil and gas production. BOGA’s core members include Costa Rica, Denmark, France, Greenland, Ireland, Quebec, Sweden and Wales while California, New Zealand, and Portugal joined as associate members and Italy joined as a “friend” of BOGA.

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The funding for the two projects was granted under the ‘Energy Technology Development and Demonstration Programme’ (EUDP), a Danish public subsidy scheme, supporting new technology in the field of energy, which can contribute to meeting Denmark’s objectives within energy and climate.

Anne Grete Holmsgaard, chair of EUDP’s board, explained that the two projects have the task of storing the CO2 in the subsoil but are using a different method. “It is important not to put all eggs in one basket,” she said.

Project Greensand

The primary objective of the Greensand project is to permanently store potentially up to 8 million tons of CO2 per annum in the Ineos-operated Siri area. According to Ineos, the storage potential in Project Greensand is ½-1 million tons of CO2 per year from 2025, increasing to 4-8 million tons of CO2 per year by 2030.

Siri area North Sea - Project Greensand
Siri area; Source: Project Greensand

About a year ago, the project cleared a major hurdle as DNV GL independently certified that the Nini West field, which is part of the Siri area, is conceptually suitable for injecting 0.45 million tons CO2 per year per well for a 10-year period, and that the subsea reservoir can safely contain the CO2.

The Greensand project has three phases: Appraisal, Pilot (Proof of concept) and Full project execution. The first phase has been completed and planning for the Pilot phase is now underway with the potential to start immediately.

The FID for full-scale project will start after proof of concept, planned FID in the second half of 2023, and will have an estimated delivery duration of around 24 months after which carbon storage could be operational from around 2025.

It is also worth mentioning that Maersk Drilling has recently been selected as the preferred contractor with a right to all drilling rig work involved in Project Greensand on market-rate terms until the end of 2027.

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“The entire consortium has been waiting in the starting block and we are ready to start working on the project so we can help reach the ambitious climate ambitions as soon as possible,” said Mads Gade, Head of Ineos Energy, Denmark.

Project Bifrost

The Bifrost CCS partnership consists of the Danish Underground Consortium (Noreco 36.8 per cent, TotalEnergies 43.2 per cent and Nordsøfonden 20 per cent), which produces 85 per cent of the oil and 97 per cent of the gas from the Danish North Sea, Ørsted who is the owner of the pipelines connecting the DUC fields to shore, and The Technical University of Denmark (DTU) who will be an academic partner.

Harald A and B facilities - North Sea
Harald A and B facilities; Source: Ramboll

The Bifrost storage will have an expected startup storage capacity of 3 million metric tons of CO2 per year (m/tpa). In addition, Project Bifrost includes a study to qualify the potential use of additional DUC North Sea reservoirs as they become available, as well as the possibility to use the existing pipeline infrastructure connecting the DUC fields to Denmark.

Noreco believes that reusing the pipeline infrastructure to the Danish shore could become the core of a national CO2 transportation system, and is a first step to connect to a future European cost and climate efficient CO2 transportation system. This will be matured towards a final investment decision (FID) if the development and demonstration program proves successful.

“The use of existing infrastructure for carbon capture and storage is a highly attractive alternative from both a climate and economic perspective when oil and gas production gradually cease,” said John Hulme, Chief Operating Officer in Noreco.

Noreco entered into a CCS partnership with Ørsted and the DTU together with its partners in the Danish Underground Consortium (DUC) in September this year.