Oil and gas firms Harbour Energy and bp have announced a collaboration to develop the Viking CCS transportation and storage project in the UK.
The deal comes after the UK Government decided to launch Track 2 of its CCS cluster sequencing process and recognized Viking CCS as one of top two transport and storage system contenders for this process.
The project is located in the Humber region and could meet about 33 percent of the UK Government’s target to capture and store up to 30 million tons of CO2 per year by 2030.
Under the agreement, Harbour will remain the operator of Viking CCS with a 60-percent interest, while bp will acquire a 40-percent non-operated share.
“We welcome the UK government’s recent announcement about the launch of Track 2 and the addition of bp as a partner to this transformational project,” said Linda Z Cook, CEO of Harbour Energy. “Viking CCS has the potential to unlock billions of pounds of investment across the full CCS value chain and is crucial for the UK to meet its emissions reduction targets.”
According to Harbour Energy, the development of the Viking CCS project could be transformational for the region, potentially unlocking up to £7 billion (about $8.7 billion U.S., at current exchange rates) of investment across the full CO2 capture, transport and storage value chain over the next decade. The project is also estimated to create more than 10,000 jobs during construction and provide around £4 billion of gross value add to the Humber and its surrounding areas.
A final investment decision is expected in 2024, subject to the outcome of the Track 2 cluster sequencing process. The project could be operational as early as 2027 and have the potential to store up to 10 million tons of CO2 per year by 2030 and up to 15 million tons by 2035.
“We’re extremely excited to be joining Viking CCS, a project which can play an instrumental role in helping to decarbonize the UK and providing CO2 transport and storage as a service to emitters across industry sectors and geographies, including as a future CO2 shipping destination,” said Anja Dotzenrath, Executive Vice President of bp’s Gas and Low Carbon Energy business.
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The two companies already share an interest in the Lincolnshire Offshore Gas Gathering System (LOGGS) pipeline, which will be repurposed as part of the project. The move is expected to create a low-cost opportunity to connect customers to the depleted Viking gas fields, which have had their 300 million tons of CO2 storage capacity independently verified recently.
Additionally, the Viking CCS project has access to a new CO2 shipping terminal that is planned to be set up at the Associated British Ports’ Port of Immingham. The facility could potentially transport CO2 from dispersed emitters, both in the UK and internationally, for permanent storage within the Viking fields.
The Humber region is one of 17 global "industrial clusters" which are committing to decarbonization efforts on a variety of fronts. These include projects to develop hydrogen fuels, electrification, renewables and carbon capture, as well. Companies such as consulting and services firm Accenture are advising many of those industrial entities and working to bring more industrial clusters, including some in the U.S., onboard.
“They’re trying to bring communities along with them,” Accenture’s Melissa Stark, global energy transition services lead at the company’s London office, pointed out last week during the Accenture International Utilities and Energy Conference in Los Angeles.
“With the tools available the line to implementation is very clear,” Stark added. “The biggest challenge is competitive concerns. Companies aren’t used to working together for the bigger prize.”
