Scotland's Acorn carbon capture project has signed a provisional agreement with several of its customers including oil giants ExxonMobil and Royal Dutch Shell in a project to bring together some of the UK North Sea's biggest players.
St Fergus Gas Terminal/Refinery, North of Peterhead, Scotland. Photo: Ewan Chesser / Shutterstock
St Fergus Gas Terminal/Refinery, North of Peterhead, Scotland. Photo: Ewan Chesser / Shutterstock
Acorn plans to initially use carbon capture and storage (CCS) technology at the St Fergus terminals in northeast Scotland where around one-third of the UK's natural gas comes ashore. The project aims to be among the first large-scale CCS projects in the country by the middle of the decade.
The deals, which were announced on Friday, cover two of St Fergus' three terminals, one of which is jointly owned by Shell and Exxon. The other is owned by North Stream Midstream Partners, which is owned jointly by the Kuwait Investment Authority and JPMorgan's Infrastructure Investments Fund . which acquired the terminal in 2015 along with its main feeder pipelines.
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"This really is a momentous day for us," said Nick Cooper, CEO of Storegga, whose subsidiary Pale Blue Dot is heading the project along with Shell and Harbour Energy, two of the UK North Sea's largest producers.
"Signing the MoU to begin this important work on the St Fergus CO2 emissions represents a key milestone for the Acorn Project and its ability to deliver progress towards the UK’s net-zero goals.
"These emissions should be the first of many as we plan to scale the project to store more than 20 million tonnes per year of CO2 emissions from Scotland, the UK and potentially Europe by the mid-2030s," he added.
In recent weeks, the Acorn project has been gathering pace with most of the North Sea's major players linked to the project.
Acorn aims to connect a cluster of industrial hubs around the North Sea, which account for around 80% of Scotland's CO2 emissions.
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The Neccus Alliance, which compromises energy companies, universities and arms of the Scottish government, has laid out a road map to connect the carbon capture project at St Fergus with the nearby port of Peterhead, then on to Grangemouth to the west of Edinburgh.
The project is also looking to produce hydrogen from natural gas, which will be fed into the UK's gas network as governments search for low-carbon fuels as the push to decarbonise continues.
Last week, Ineos, which operates the Grangemouth oil refinery and petrochemical facility as well as the Forties pipeline through which much of the North Sea's oil and gas comes to the UK, signed a Memorandum of Understanding with Acorn.
As governments commit to cutting carbon emissions to net-zero by 2050 - in Scotland's case 2045 - interest in CCS has soared. The technology works by stripping the CO2 from fossil fuels and storing it in repurposed oil or gas reservoirs in the North Sea.
The UK is also currently developing other large scale hubs in Teesside and Humber.
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A government-backed £1 billion CCS Infrastructure Fund has been put in place in order to reduce the risk for private investors in the process, which is still in its early stages.
ExxonMobil described the Acorn project as having "the potential to provide more than half of the 10 million tonnes per year of CO2 storage targeted by the UK government," adding that it has the potential to double by the mid-2030s.
The US oil giant has come under increasing pressure to increase its actions with regard to climate change, especially in the wake of Channel 4 News sting operation that saw one of the company's lobbyists speaking with alarming frankness about the method's used by the sector's oil and gas lobbyists in Washington DC.
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