Norway awards CCS licenses to Equinor, Horisont Energi, Vår Energi

The Norwegian Ministry of Petroleum and Energy has awarded carbon capture and storage (CCUS) licenses to Equinor, Horisont Energi, and Vår Energi.

CCUS is necessary for achieving the climate goals. Carbon transport and storage infrastructure (CCS) is crucial for providing CO2 solutions on a commercial basis.

Safe capture and storage of CO2 is also an enabler for developing blue hydrogen and ammonia. With CCS, blue hydrogen and ammonia can eliminate emissions from the use of gas, thus ensuring access to large amounts of low-carbon energy. With the use of CCS, emissions can also be significantly reduced from gas-fired power plants.

In December, Norway’s government received applications from Shell, Equinor, Horisont Energi, Northern Lights JV, and Vår Energi related to two areas on the Norwegian continental shelf to be allocated for the injection and storage of CO2. After that, the ministry moved on to processing the received applications with plans to allocate the areas during the first half of 2022.

On 5 April, Norway’s energy ministry announced the award of CO2 licenses. One of the two exploration permits under the storage regulations is located in the North Sea and one in the Barents Sea. The North Sea one is offered to Equinor, while the license in the Barents Sea is offered to a group consisting of Equinor, Horisont Energi, and Vår Energi. 

Specifically, the ministry awarded Equinor the operatorships for the two licenses referred to by the company as “Smeaheia” and “Polaris”. In its application, Equinor has submitted plans to develop the CO2 storage capacity in Smeaheia at 20 million tonnes annually.

Northern Lights, the CO2 storage facility in the Longship project, has a planned injection capacity of 1.5 million tonnes a year in Phase 1 available from 2024. Further plans include developing the capacity to 5-6 million tonnes a year from around 2026.

Polaris CCS is located in the Barents Sea. The storage is a key part of the Barents Blue project which Equinor, Vår Energi, and Horisont Energi are developing. The project is developing an ammonia production facility at Markoppneset in Hammerfest that will reform natural gas from the Barents Sea to clean, blue ammonia using CCUS.

The first stage of the development includes the capture, transport, and storage of 2 million tonnes of CO2 each year.

The Polaris license is to provide the necessary storage capacity for Barents Blue, including all potential expansions. Additional storage capacity will be offered to third parties in Norway and Europe.

“The CO2 quota price almost tripled in 2021, and the number of available quotas will continue to decline in the coming years to meet the 2030 climate goals in the EU. This trend makes CO2 storage commercially attractive for several industries. We firmly believe that Polaris will meet a shortage in the carbon storage market,” said Haukelidsæter Eidesen, CEO of Horisont Energi.

With these two projects, Equinor aims to contribute to CO2 reductions equivalent to half of Norway’s annual emissions. Equinor also has ambitions to develop further storage licenses in the North Sea in the coming years.

In October 2021, Equinor launched Norway energy hub, with a goal to further develop Norway as an energy nation. Norway energy hub consists of four building blocks: decarbonisation of oil and gas, industrialisation of offshore wind, commercialisation of CCS, and large-scale hydrogen production.

Equinor says it has the ambition to develop value chains for CO2 transport and storage with an annual capacity of 15-30 million tonnes of CO2 within 2035. Collaboration between industries, governments, and organisations is crucial to success.