OIL and gas heavyweight Neptune Energy has underlined its belief in the potential of the North Sea carbon capture and storage (CCS) market amid growing interest in the sector.
On Wednesday private equity backed Neptune confirmed that it had made an application to the Oil and Gas Authority for a licence in connection with a plan to develop a CCS facility, which it plans to link to a hydrogen production plant.
READ MORE: International financiers set to back major North Sea carbon capture project
The company said yesterday: “The proposed DelpHYnus development provides a CO2 transport and storage solution for the South Humber industrial area, together with facilities for low carbon hydrogen using natural gas from the grid.”
It added: “Neptune has proposed an ambitious work programme for the appraisal phase of the project and is in discussions with potential partners for the hydrogen plant.”
Humberside is one of a number of areas that is competing to win backing under the UK Government’s plans to encourage the deployment of carbon capture and storage technology to help meet emissions reductions targets.
The Government has committed £1bn funding to help create two carbon capture clusters by the mid-2020s, with another two set to be created by 2030.
The Acorn project in Scotland also hopes to win selection. Acorn is expected to involve pumping carbon dioxide from across Scotland offshore for storage in depleted North Sea reservoirs and the development of related hydrogen production facilities. The project is being led by Storrega, which has won backing from international financiers. Royal Dutch Shell and North Sea focused Harbour Energy are partners in the project.
The partners have joined forces with Scottish Enterprise and the NECCUS alliance of businesses, academics and public sector bodies to launch a campaign to support Acorn under the Back the Scottish Cluster banner.
Storrega chief executive Nick Cooper said: “Of all the UK CCS projects, Scotland is blessed with the largest, most scaleable and most advanced infrastructure.” This includes the deepwater port at Peterhead and the St Fergus Gas terminal in Aberdeenshire.
Plans for CCS clusters on Teesside, Merseyside and in South Wales are also under development.
Neptune grew first quarter profits by 65 per cent to $77.9 millon from $47m last time, helped by the increase in oil prices that has accompanied the rollout of coronavirus vaccines.
The company generated cash from its North Sea production operations, which include the giant Cygnus gas field.
However, Neptune said: “While the roll-out of Covid-19 vaccination programmes are a cause for optimism in many places, we remain cautious about the short-term impact of the pandemic on global demand and prices.”
READ MORE: Could hopes of Shetland oil boom revive?
Brent crude sold for $67.45 per barrel yesterday afternoon, down $1.87/bbl on the day. Fears about rising inflation rates weighed on markets.
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