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Norway, Equinor back blue hydrogen as Longship CCS advances

29 January 2021 Cristina Brooks

European oil majors have selected the builders of a Carbon Capture and Storage (CCS) demonstration project seen as key to meeting Norwegian-and global-emissions reduction and blue hydrogen goals.

Norway's parliament, the Storting, approved funding for 70% of the US$2.6 billion project, called Longship CCS, in December 2020. State-controlled energy company Equinor, along with Shell and Total, manage a part of the project through their Northern Lights joint venture, focusing on the offshore part of the process, including storage and shipping.

They have now signed up contractors to start building the project in 2022 on the path to ramping it up in 2024. Equinor on 28 January said it had hired contractor Subsea 7 Norway to build pipelaying and subsea installations and Aibel to build a subsea control system. Aibel's work will be carried out at Equinor's existing concrete offshore platform Oseberg A, alongside an offshore natural gas processing and drilling facility just off the western coast of Norway.

"Most contracts are now in place, and we look forward to working together with the selected suppliers to realize this pioneering project," said Equinor Chief Procurement Officer Peggy Krantz-Underland in a statement.

The Longship CCS project is set to capture emissions from at least one industrial facility, a cement plant—with the addition of a waste incineration plant to be decided in the future. It will see carbon dioxide (CO2) transported by ship to an offshore rig, then piped into a reservoir under the seabed for storage.

Beyond demonstrating the value of CCS at scale in Europe, Longship CCS is one of few, if any, such projects to use a ship for CO2 transportation, allowing more businesses to participate in carbon storage, said Shell. It is also one of few to focus on industrial rather than power generation emissions, analysts at IHS Markit wrote in a recent paper on the project.

The project is specifically designed to handle imported industrial emissions from the rest of Europe, where certain industries are obliged to buy carbon allowances under the EU Emissions Trading System (ETS). Several industrial emitters already have tentative deals with the project, according to Shell.

According to Norway's government, Longship CCS also facilitates the EU's Green Deal, the legislative framework for reaching its goal of a 55% emissions reduction compared with 1990 levels by 2030.

Beyond helping many to toe the line on EU laws, CCS could be a crucial part of global obligations under the Paris Agreement. A 2018 paper by the Intergovernmental Panel on Climate Change found CCS is required under three of four pathways to avoiding catastrophic global warming by keeping the global temperature increase below 1.5 degrees Celsius (34.7 degrees Fahrenheit) compared with pre-industrial levels.

Blue hydrogen

Apart from proving carbon capture technology, Longship CCS is "foundational" for the fledgling market for blue hydrogen, the lower-carbon fuel made from natural gas that uses CCS to stash the emissions away, the IHS Markit paper said.

Gas-rich Norway could profit from blue low-carbon hydrogen. "Longship facilitates the production of blue hydrogen from natural gas with carbon capture and storage. This results in hydrogen with very low emissions and major potential for value creation in Norway and for greenhouse gas emission cuts in Europe," Norway's government said in the statement.

Equinor is also targeting blue hydrogen from natural gas in trial projects. It produces blue hydrogen in the English town of Hull under its UK-government-backed Zero Carbon Humber project launched in 2019. The state-controlled oil company is looking to produce hydrogen for consumers in industry, particularly the steel industry, as well as for power generation and storing carbon from power generation through its Magnum project with Swedish utility Vattenfall.

"This background in CCS makes us see that it's also going to be a key enabler, we believe, for clean hydrogen production at industrial scale," Equinor's Head of R&T Low Carbon O&G Technologies Hege Rogno told the Go Net-Zero Carbon Energy webinar on 27 January, adding that the company plans to produce hydrogen for maritime markets in Norway.

She said fossil fuel-sourced hydrogen is not new and that it's not necessarily outdated in a low-carbon world. "What's new now is that we'll take this CO2 out of the mix through production and storage under the subsurface. We believe we can do that, capture more than 95% of the CO2, and through that produce clean hydrogen that can be used for energy-intensive segments for power and heat generation, heavy transport, maritime transport and industry," said Rogno.

Equinor's blue hydrogen could compete with green hydrogen. "I think it's important to point out that the CO2 footprint of hydrogen produced from natural gas will be very low. In the instances where we produce and use new reforming technologies, we can capture 95% to 97% of the CO2. So, it will be on par with hydrogen produced from electrolyzers, or from renewable energy," she said.

Covering all bases, Equinor also has a foot in the door on green hydrogen as a partner in NortH2. This project will use an electrolyzer facility to produce green hydrogen from an offshore wind farm in the Netherlands.

All these plans sound optimistic, but the future of the CCS market that blue hydrogen relies upon depends on the success of projects like Longship CCS in the face of claims it remains unproven.

Norway's previous attempt at CCS was called a "catastrophe" by Per Brevik, European head of sustainability at HeidelbergCement Group, whose subsidiary is involved in the capturing part of Longship CCS. Norway's government decided to shutter the high-profile CCS plant at Mongstad-which Equinor, Total, and Shell also had an interest in-in 2013. This was just a year after it was inaugurated, with the government citing high costs and the low prices for carbon credits the project hoped to produce.

Equinor believed high costs and a lack of CO2 storage facilities had previously limited the development of a low-carbon value chain for natural gas-derived hydrogen, according to a 2017 statement.

CCS must also face up to critics who say it is not net-zero because of methane leaks in the fossil fuel supply chain and, possibly, in CCS storage, meaning the cost of insuring against leaks must be borne by the taxpayer, according to the chief executive of UK electrolyzer manufacturer ITM Power, Graham Cooley.

Norway goes all in on CCS

This month, Norway's government tightened its Paris Agreement decarbonization goal to 50-55% emissions reductions by 2030, upping the ante in its pursuit of viable domestic CCS. It is gearing up to publish an explanatory white paper.

While Norway plans to decarbonize in the future, it will not halt production at oil and gas fields, according to Minister of Petroleum and Energy Tina Bru, who spoke at Davos Energy Week on 19 January. "Our long-term goal is not to reduce production by 50%. It's to reduce emissions by 50%. Our long-term goal for the region's oil and gas sector is to maintain stable production at levels that we're seeing now," she said.

"That will, of course depend on whether we find more kinds of investments, kinds of projects that are going forth on the common continental shelf," said Bru, referring to the area where construction of Longship CCS and fossil fuel projects is taking place.

Bru said that Norway's goal was "to produce all profitable resources" from regional oil and gas, but this will mean developing the decarbonization aspect of that industry and increasing a CO2 tax on producers from about US$69 per metric ton to US$234 per metric ton by 2030.

Norway's efforts to drive its climate goals forward at the same time as continuing oil and gas production seem to at least partly rely on CCS. "[Hydrogen] is another thing that we can see the potential for here in Norway, not only because we have huge natural gas resources that can be created for hydrogen using CCS, which will remove the emissions from that hydrogen," said Bru.

She implied Norway would be providing a global CCS service. "At the Northern Lights project, the storage has the capacity for CO2 emissions storage from other places in the world," said Bru, adding: "I think this is also something that we can use if we wanted to pull out hydrogen from natural gas on a big scale. Because it has to be clean, there really isn't room for emissions from energy sources when we're getting to 2030 and up to 2050. So, we have to plan for energy that is clean. But I think gas can also play a role when it comes to hydrogen."

At the same time, the nation's abundant supply of renewable energy makes green hydrogen a potential resource as well. "We're creating a roadmap for that to follow up on the strategy for hydrogen that we actually presented just last year," said Bru.

Posted 29 January 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

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