Shell, BP, Eni Accept Licenses for First Ever UK Carbon Storage Round

The UK North Sea Transition Authority (NSTA) has announced a list of companies that have accepted licenses following the UK’s first ever carbon storage licensing round.  

A total of 14 companies have been awarded 21 licenses in depleted oil and gas reservoirs and saline aquifers which cover around 12,000 square kilometers, the NSTA said in a release posted on its website. The locations could store up to 30 million tons of CO2 per year by 2030, according to the NSTA, which highlighted that this equates to approximately 10 percent of UK annual emissions.

Shell, Perenco, and Eni have all been awarded licenses off the coast of Norfolk in sites which could form part of the Bacton Energy Hub, the NSTA highlighted in the release. The organization described Bacton as a carbon storage, hydrogen, and offshore wind project that could provide low-carbon energy for London and the south-east “for decades to come and help in the drive to net zero greenhouse gas emissions”. 

Spirit Energy Production UK Ltd, Pale Blue Dot Energy Ltd, Enquest CCS Ltd, Synergia Energy CCS Ltd, Neptune Energy CCS Projects, Chrysaor Production UK Ltd, BP Exploration Operating Company Ltd, Carbon Catalyst Ltd, Wintershall Dea Carbon Management Solutions UK, Esso Exploration and Production UK Ltd, and Equinor New Energy Ltd were also awarded license stakes, the NSTA release outlined.

It is estimated that as many as 100 storage licenses will be needed to meet the requirements for reaching net zero, the NSTA said in the release, adding that “the volume of applications received for the first round demonstrated the industry’s desire for further opportunities”. 

“The NSTA will assess the response and the quality of opportunities in locations across the UK before deciding when to run a second round,” the organization noted in the release.

“Six licenses have already been granted by the NSTA and the government recently announced GBP 20 billion [$24.86 billion] funding for the progression of these existing projects,” the NSTA added.

In the release, the NSTA highlighted that it, The Crown Estate (TCE), and Crown Estate Scotland (CES) are working in close collaboration to help meet the UK government’s “ambitious” carbon storage targets of 20-30 million tons of CO2 emissions per year by 2030, and over 50 million tons by 2035, “and make a significant contribution to net zero”.

“Carbon storage will play a crucial role in the energy transition, storing carbon dioxide deep under the seabed and playing a key role in hydrogen production and energy hubs,” NSTA Chief Executive Stuart Payne said in the release.

“It is exciting to award these licenses and our teams will support the licensees to bring about first injection of carbon dioxide as soon as possible. We will also continue to work with industry and government to enable further licensing activity and back the UK’s drive to net zero emissions,” he added.

Ruth Herbert, the Chief Executive at the Carbon Capture and Storage Association (CCSA), said in the release, “the CCSA welcomes the acceptance of carbon storage licenses, a significant step towards achieving net zero”.

“These licenses mark a substantial milestone towards widespread deployment of CCS. With the potential to store almost 10 percent of the UK’s greenhouse gas emissions in these new locations, starting to develop these sites paves the way for a cleaner and more sustainable future,” Herbert added.

“The next step is a carbon capture deployment plan to enable us to fully exploit our future CO2 storage capacity,” Herbert continued.

Lord Callanan, the UK Minister for Energy Efficiency and Green Finance, said, “the UK has one of the largest potential carbon dioxide storage capacities in Europe, putting us in prime position to be world leaders in carbon capture – which is why we’ve committed an unprecedented GBP 20 billion to develop the early stage development of carbon capture, usage and storage”.

“These new licenses confirmed … will be vital to realizing our CCUS potential, playing a key role in the energy transition to help boost our energy security and achieve our net zero targets, while also bringing in private investment and supporting thousands of jobs,” he added.

In a statement posted on its website, industry body Offshore Energies UK (OEUK) said the NSTA’s carbon storage license announcement “marks a significant step towards reducing the nation’s carbon footprint, while providing growth opportunities for energy workers and businesses”.

“Carbon capture and storage will be a major tool in the fight against climate change and will drive economic growth,” OEUK Sustainability and Policy Director Mike Tholen said in the statement.

“With the potential to store up to 78 billion tons of carbon dioxide underneath the UK’s oceans, the UK can lead the way,” he added.

“We have an oil and gas industry with the right expertise, skills, and people needed to make this a British success story, and these licenses are another step towards achieving that goal. If we get this right, it could not only significantly reduce the UK’s carbon footprint, but position us as world leaders in the low carbon space – creating opportunities for UK people and businesses and playing on our industrial strengths,” Tholen continued.

“We will need 100 such sites or more to reach net zero, so we mustn’t stop here. The companies investing in nascent opportunities like carbon storage will require the cash flow from a stable and predictable oil and gas business to fund these technologies,” Tholen went on to state.

Earlier this month, the NSTA announced that greenhouse gas emissions from UK offshore oil and gas production were cut for the third consecutive year in 2022 “as industry continued its drive to reach net zero by 2050”. 

“Last year’s estimated three percent reduction contributed to a 23 percent drop in greenhouse gas emissions between 2018 and 2022, according to the latest Emissions Monitoring Report from the North Sea Transition Authority,” the NSTA said in a statement posted on its website on September 5.

“This industry remains well on track to meet targets to cut emissions 10 percent by 2025 and 25 percent by 2027, as agreed in the North Sea Transition Deal with the UK government in March 2021,” it added.

“However, bold measures will be required to hit the key target of halving emissions by 2030 – the absolute minimum the NSTA expects from industry, which must strive to surpass this goal,” the organization warned.

To contact the author, email andreas.exarheas@rigzone.com