Yahoo Finance BP backs net zero project to store carbon under the North Sea
BP will help develop one of the UK’s leading carbon capture projects as the Government hopes to accelerate development of the technology in its push for net zero.
The oil and gas giant is paying an undisclosed sum for a 40pc stake in the Viking carbon capture and storage (CCS) project owned by its North Sea rival Harbour Energy.
The project will take carbon dioxide emitted from factories in the Humber region and stash it in empty gas fields under the southern North Sea.
Harbour aims to store up to 10 million tonnes of carbon dioxide per year by 2030, representing around a third of the Government’s national target.
BP has been investing in carbon capture as part of its push into cleaner energy, and is also developing a gas-fired power station, in Teesside, with the technology fitted.
Anja Dotzenrath, from BP, said the Viking CCS project will “play an instrumental role in helping to decarbonise the UK” and could also be used as “a future CO2 shipping destination”.
Linda Cook, chief executive of Harbour Energy, said the project has the potential to “unlock billions of pounds of investment” in carbon capture and storage technology and the industries it impacts.
The Government is relying on such projects to be able to meet its legally binding target of cutting carbon dioxide emissions to net zero by 2050.
The technology captures carbon dioxide when it is emitted, for example at a factory or power plant, then stores it underground so it does not disperse into the atmosphere.
It is not yet used at scale in the UK, but there are several projects in development, including the Acorn CCS project in Scotland.
BP and Harbour Energy’s backing is a sign of the improving commercial case for the technology, raising hopes a UK industry can emerge following several false starts.
The UK is considered a particularly suitable staging area thanks to vast depleted oil and gas fields in the North Sea where carbon dioxide can be stored.
Harbour Energy said it plans to take a final investment decision on the Viking project next year, depending on government support.
The project could then be up and running by 2027, with Harbour Energy staying on as its operator with a 60pc stake.
Under the plans, a new 55km buried pipeline will take emissions from heavy industry in Immingham to the Theddlethorpe Gas Terminal on the Lincolnshire coast.
From there, an existing 120km pipeline will take the emissions out to the depleted Viking gas fields, which stopped producing gas in 2018.
The Government is supporting the emerging carbon capture industry including through grants and guarantees on revenues.
In March, the Government said it would invest £20bn over the next 20 years into the industry. Some of the support will come via levies on consumer bills.
The Treasury said the funding would provide industry with the “certainty required to deploy CCUS [carbon capture, utilisation and storage] at pace and at scale”.
It comes after David Cameron pulled £1bn in planned funding for planned UK carbon capture trials in 2016.
The move prompted developers including SSE and Shell to pull out of projects at the time. Both are now involved in new UK developments.
Two projects based near Hull and Liverpool were picked by the government in October 2021 and fast-tracked to be up and running within a few years.
Ministers have indicated the Viking and Acorn projects could be next in line for support.
Harbour Energy is the North Sea’s largest oil and gas producer, but has recently revealed plans to shift investment abroad due to the UK’s windfall tax on oil and gas production.
BP plans to invest up to £18bn in its UK operations this decade, including through oil and gas production, wind farms and carbon capture.
