“The government is committed to facilitating to ensure that CO2 storage can become a commercially profitable and sustainable ocean industry in Norway. For the players to succeed with their ambitious plans, the storage part of the value chain must also be in place. These awards are, therefore, a new, important step towards establishing Norway as a leading player in large-scale commercial CO2 storage for European emission sources,” said Minister of Energy Terje Aasland.
The four exploration licenses that have been offered are located in the North Sea. Two of the licenses are offered to Equinor ASA. One license is offered to a group consisting of Vår Energi ASA, OMV (Norge) AS, and Lime Petroleum AS, and one license is offered to a group consisting of Aker BP ASA and PGNiG Upstream Norway AS.
The licenses are offered with a binding work program, which includes mileposts that ensure fast and efficient progress or return of the areas if the licenses do not carry out the storage project.
“The awards are given to companies that have matured good industrial plans. The interest in new storage space by several players in the industry makes me optimistic about the future work of making CO2 storage one part of the solution to the world’s climate challenges,” said Aasland.
More information, maps, and work programs can be found on the Norwegian Offshore Directorate’s webpage.
Background
Activities aimed at surveying and exploring subsea reservoirs for the storage of CO2, as well as exploitation, transport, and storage of CO2 in such reservoirs on the Norwegian continental shelf, are subject to the regulations on transportation and storage of CO2 into subsea reservoirs on the continental shelf (regulation no. 1517).
Anyone who is conducting such storage operations needs a permit in accordance with the regulations. In addition, on February 20, 2020, the Petroleum Safety Authority established regulations on safety and the working environment for the transport and storage of CO2 on the continental shelf (the CO2 safety regulations).
The Norwegian government is facilitating the socio-economically profitable storage of CO2 on the Norwegian continental shelf. Companies that have the necessary expertise and specific industrial plans that entail a need for storage on a commercial basis can apply to the Ministry of Petroleum and Energy for a license adapted to the needs of the business. The government will conduct a predictable, efficient, and flexible process to award industrial players access to relevant storage options. Areas that are relevant for awards will be announced, among other things, to ensure competition.
In line with the regulations on the transportation and storage of CO2 into subsea reservoirs on the continental shelf, the ministry normally expects to award an exploration license prior to awarding an exploitation license in a relevant area. Exploration licenses can be awarded to one or more competent companies. If a license is awarded to several companies, the ministry will generally appoint one of the companies as the operator.
The award of exploration licenses will normally be done with a work program that includes one binding phase and subsequent conditional phases with decision points for continuation or relinquishment. Relinquishing allows other stakeholders with storage needs to apply for awards of the area. The work program will normally end with a demand that the companies make an investment decision on the realization of CO2 storage and that they then submit a plan for development and operation (PUD) for the storage location or relinquish of the area.
