Press release | Date: 08/01/2020 | Ministry of Petroleum and Energy| No: 049/19
The government proposes to allocate a total of 628 million NOK for the development of carbon capture and storage (CCS).
The government has already spent large sums on research and development, demonstration and planning of the CCS full scale project. The budget proposal for 2020 includes continuation of the work with a full scale CO2 capture, transport and storage project, funds for operation of the Technology Centre at Mongstad (TCM) and for the research program Climit.
— CO2 capture and storage will be one of several necessary tools to reach the goals in the Paris Agreement. The government will continue to develop technology for CO2 capture, transport and storage and we have spent large funds on the development and planning of full scale projects. We propose to continue this effort in 2020, says Minister of Petroleum and Energy, Kjell-Børge Freiberg.
The effort to develop a full scale project for capture and storage of CO2 will continue. The government proposes to allocate 215 million NOK to the industry actor's work with the project in 2020. This will facilitate the continuation of the project maturation.
The Government will consider realisation of the project once the front end engineering and design studies and the external quality assurance process has been completed. When assessing an investment decision, the government will evaluate the results from the front end engineering and design studies, the potential for benefit realization and the economic leeway.
The case will be presented to the Parliament. The government has stated that an investment decision can be made in 2020/2021. Both the government and the industry emphasize the importance of spending sufficient time planning the project. Sufficient planning is also advised by the external quality assurance.
— The Government has an ambition is to realise a cost effective solution for CCS in Norway, provided this results in technology development internationally. The proposed state budget facilitates the necessary progress towards an investment decisions, says minister Freiberg.
The state will decide whether to continue the operation of TCM when a new participation agreement draft is available. The state wish for increased participation and financial support from the industry. There are ongoing negotiations between Gassnova and the industrial owners of TCM to land a new agreement for continued operation of TCM after the current participation agreement will expire in August 2020.
The government will continue to support research, development and demonstration of CCS technology through the CLIMIT program and the research centre for CCS at SINTEF in Trondheim.
While treating the RNB 2018 the parliament decided to give its consent to the government's recommendation on continuing the planning of the full scale project until an investment decision in 2020/2021. The capture projects are taking place at Norcem and Fortum Oslo Varme (FOV), and Equinor cooperates with Shell and Total on the project for the transport and storage solution.
The estimated capital cost for full scale CCS facilities and operational costs for five years is 11,2 billon NOK (Norcem) and 11,8 billion NOK (FOV).
The broad international set of actors involved in the Norwegian CCS project provide a good basis for international technology development and knowledge dissemination. The actors include Finnish Fortum, German Heidelberg, French Total and British/Dutch Shell, along with large Norwegian actors with international presence, like Equinor and Aker Solutions.
The current development schedule for the full scale project indicates an investment decision in 2020 aligned with the state budget for 2021. That is a very tight schedule. According to the external quality assessment a project schedule aiming for an investment decision in 2020 seems to be thoroughly planned, however there is significant schedule risk. Nevertheless, the external quality assessor is of the opinion that the plan is executable and points out that it is an advantage that all actors are aware of the risk and that risk-reducing measures are being implemented. The government is therefore still aiming for an investment decision in 2020/2021.