Polish firm pursuing operator role for only CO2 exploration license in Barents Sea
Horisont Energi has signed a Letter of Intent (LoI) with energy company PGNiG Upstream Norway (PUN), part of Poland’s ORLEN Group, under which PUN aims to enter as a partner and operator in the only CO2 exploration license in the Barents Sea.
The Norwegian Ministry of Petroleum and Energy announced the award of the Barents Sea CO2 license to a group consisting of Horisont Energi, Equinor and Vår Energi on 5 April 2022. Located in the Norwegian part of the Barents Sea, 140 kilometers off Hammerfest, the CO2 exploration license EXL003 with the project name Polaris License is currently fully controlled by Horisont Energi.
The LoI lays the ground for clearing formalities with authorities necessary for PUN to become the operator and acquire a participating interest in the license. This process is expected to be completed by early December.
The agreement is said to be in line with ORLEN Group’s strategic decision to enter the CO2 storage business, with the Norwegian Continental Shelf as one of the key markets for its implementation. Thus, the Polaris project is the company’s first-ever intended CO2 license.
“In line with the ORLEN Group’s strategy, over the next few years we will build strong competence in the area of carbon management. The expertise we wish to gather partnering with Horisont Energi on the Polaris project will also be used in Poland. It will allow us to effectively implement proven and safe technologies of CO2 storage and prepare a competitive offer of carbon management for Polish industry,” said Daniel Obajtek, CEO and President of the ORLEN Management Board.
According to Horisont Energi, PUN as partner and operator in Polaris is an important third key element over the last months. The first element was to secure the power supply for the planned Barents Blue ammonia plant in Northern Norway in June and the second was the joint development agreement signed with the fertilizer company Fertiberia in late August for the joint development of the Barents Blue ammonia plant.
The planning of the Polaris CO2 storage started in February 2020 and, upon application to the authorities, was formally awarded in June 2022. The license is expected to provide the necessary storage capacity for Barents Blue, with additional storage capacity expected for other CO2 customers in Norway and Europe.
Horisont Energi and E.ON have previously signed a LoI for the storage of about one million tonnes of CO2 in the Polaris license. Together with the two million tonnes of CO2 annually from the Barents Blue ammonia plant and additional CO2 volumes in Northern Norway, there is said to be a substantial commercial basis for the development of the Polaris license.
“Joining forces with PGNiG Upstream Norway is an important milestone in our quest to achieve significant emission reductions and contribute to the emerging CCS industry,” said Bjørgulf Haukelidsæter Eidesen, CEO of Horisont Energi.
“PGNiG Upstream Norway is a robust and qualified partner with ample operatorship and offshore experience from the Norwegian Continental Shelf. The new partnership should also help advance our Barents Blue clean ammonia project by providing accessible CO2 storage capacity.”