The UK’s energy minister is hoping to sign off a contract for advanced design work on a carbon capture and storage plant at Peterhead power station in February.
Michael Fallon said the UK Government would commit tens of millions of pounds towards the Shell-led scheme to build the world’s first commercial-scale gas CCS project.
It would involve capturing 10 million tonnes of harmful carbon dioxide emissions at the power station, piping them 60 miles offshore to a depleted gas reservoir and storing them 1.5 miles beneath the sea bed.
A coal-based CCS scheme at the Drax power station in Yorkshire moved to the advanced design stage in December, and the Peterhead project is poised to follow it.
“It’s a decision not just for the department but for Shell,” said Mr Fallon. “We’ve not signed the contract yet.
“I’ve signed the contract at Drax – I signed that on December 20. I hope to sign the second contract in the next few weeks.”
Mr Fallon said that final decisions on the Peterhead scheme would be taken after the independence referendum in September.
Meanwhile opportunities for north-east supply chain firms in the UK’s burgeoning shale gas industry could offer a “significant second string to Aberdeen’s bow”, the energy minister said.
Mr Fallon is overseeing the UK Government’s controversial drive towards fracking and onshore shale gas recovery.
“A lot of the techniques involved in the North Sea have helped exploration in the States, particularly horizontal drilling and some of the newer seismic technologies,” he said.
“There’s a lot of business potential for the supply chain in Aberdeen. It could turn out to be a significant second string to Aberdeen’s bow.
“The governor of Texas was telling me not to underestimate the number of businesses that would be involved if we get shale.
“The last time I was in Aberdeen the city was pretty busy. All I heard about was traffic congestion, harbour congestion, companies moving out to the business parks.
“It’s still boom time in Aberdeen and we need to keep it that way.”