Oil and gas firms Shell and Harbour Energy have struck a deal to become equal-equity partners alongside Storegga in an Aberdeenshire carbon capture and storage (CCS) project.
Clean energy firm Storegga, through wholly-owned subsidiary Pale Blue Dot Energy, will continue to be the lead developer on the Acorn project.
Anglo-Dutch giant Shell and Harbour, formed last month through Chrysaor’s reverse takeover of Premier Oil, had already been providing funding and supporting technical studies to progress the project.
The so-called Acorn Development Agreement “formalises” the relationship between the trio, who will guide the initiative through to a final investment decision (FID), construction, operation and beyond.
The partners declined to provide details of any investment commitments, but said there was “still a lot of commercial work going on”.
French energy giant Total was also an early supporter of Acorn, but the Paris-headquartered firm has exited the project as part of its “portfolio management strategy”.
The decision to withdraw followed a review of its extensive portfolio of carbon capture, use and storage projects, Storegga confirmed today.
Acorn, which is based at the St Fergus gas terminal near Peterhead, is exploring using existing oil and gas infrastructure to inject and trap carbon dioxide under the North Sea.
Researchers are also exploring the potential for creating blue hydrogen using natural gas at the site, with associated emissions dealt with by CCS.
The project is expected to be operational in the mid-2020s – Storegga previously said it planned to make an FID on the project early next year.
By 2030, Acorn is predicted to be storing at least 5Mt/yr of CO₂ by 2030, half the CO2 emissions set out in the UK Government’s Ten Point Plan for a green Industrial Revolution by 2030.
It’s hoped the initiative could breathe new life into Peterhead, with the town’s deepwater port acting as a hub for the transport and storage of CO2 from across the UK and North West Europe.
Nick Cooper, chief executive of Storegga, said: “Safely and securely managing and removing the emissions of industry and society is our core business, this agreement cements our relationship with our industry partners, Shell and Harbour Energy, and allows us to look forward with confidence to the next few years as we race to tackle climate change in a way that’s sustainable, cost efficient and deliverable.”
Shell UK upstream director Steve Phimister, who is joining Petroleum Development Oman as managing director in July, said: “Shell will seek to have access to an additional 25 million tonnes a year of carbon, capture and storage capacity by 2035.
“We have large scale projects being developed in Australia and Norway, and a facility in Canada already capturing 1 million tonnes per year.
“But to reach net zero the world needs much more CCS capacity.
“The Acorn project is an exciting vision for how we could help deliver that for Scotland and the UK.”
Phil Kirk, Harbour Energy’s group president and CEO Europe, said: “Investing in carbon capture and storage initiatives is part of Harbour Energy’s commitment to a low carbon future and attaining our operational goal of Net Zero by 2035.
“We are delighted to continue working in partnership with Pale Blue Dot Energy and Shell on what is an important catalyst project for supporting decarbonisation of this region.”