Shell & Statoil Ink Deal for Large CO2 Project

Facility at Tjeldbergodden
(Click to Enlarge)
Shell and Statoil have signed an agreement to work towards developing the world's largest project using carbon dioxide (CO2) for enhanced oil recovery (EOR) offshore. The concept involves capturing CO2 from power generation and utilizing it to enhance oil recovery, resulting in increased energy production with lower CO2 impact.

The project consists of a gas-fired power plant and methanol production facility at Tjeldbergodden in Mid-Norway, providing CO2 to the Draugen and Heidrun offshore oil and gas fields. Power from the plant will also be provided to the offshore fields, enabling near zero CO2 and nitrogen oxide (NOx) emissions from these installations.

The various elements of the project will be phased in during the period 2010-2012. Establishing this CO2 value chain is technologically and commercially challenging. The project will hence depend on substantial Government funding and involvement. The project will rely on the involvement of industrial stakeholders and electricity users in the region.

The project is in line with international and national climate aspirations and responds to the important challenges of increasing energy supplies and addressing the related CO2 emissions. The project will contribute to long-term power balance in Mid-Norway. At the same time it secures stable power delivery to industry producing vital hydrocarbons for Europe. The project could potentially store approximately 2-2.5 million tons of CO2 annually in two different fields.

"This is an important milestone for Shell towards our vision for greener fossil fuels with part of the carbon dioxide captured and sequestrated underground," says Chief Executive Officer Jeroen van der Veer in Shell.

"Our aim is to establish a broad partnership in order to realize this ground-breaking project. This CO2 project responds to vital future challenges facing society, the environment and the industry," says Chief Executive Officer Helge Lund in Statoil.

Shell pioneered CO2 for EOR in the 1970s. Statoil is a pioneer in CO2 storage through Sleipner in the North Sea, Snohvit in the Barents Sea and In Salah in Algeria.

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