Petrofac and Shell Agree Partnership for North Sea CCS Project

Monday, Oct 04, 2010

CO2DeepStore, part of the Petrofac group, has signed an agreement with Shell U.K Limited (Shell) in respect of the re-development of the Goldeneye gas field in the North Sea, as a potential CO2 storage facility.

The agreement will see CO2DeepStore and Shell work together to develop the potential CO2 storage solution for the ScottishPower Carbon Capture and Storage (CCS) project - one of two contenders in the UK Government’s carbon capture and storage competition.

Work is currently progressing on the initial design phase for the carbon capture and storage demonstration project. If successful in securing Government support, this project will be the world’s first commercial scale CCS scheme to be fitted to a coal-fired power plant. Shell will be the Operator for the storage venture while Petrofac, through its subsidiary CO2DeepStore, will partner the project in addition to providing offshore engineering, modification and operations services to the storage venture through its Offshore Engineering & Operations business.

Petrofac’s group director of strategy, Rob Pinchbeck said: ”This important agreement highlights Petrofac’s commitment to the Carbon Capture and Storage sector and comes just six months after our acquisition of the CO2 storage specialist, CO2Deepstore. This is an exciting project and Petrofac is delighted to be involved in the early stages of this emerging new sector.”

For further information contact:

GolinHarris - UK                                                                                               

Rowland Barran                                                               

petrofac@golinharris.com

+44 (0)20 7067 0544

Notes to Editors

CO2DeepStore

CO2DeepStore is a leading developer of CO2 storage projects to deliver CO2 storage solutions for power generators and other CO2 emitters.  CO2DeepStore co-invests in CO2 capture, transport and storage assets, leveraging the extensive engineering and operations capability of the Petrofac group to enhance project returns in alignment with partners. 

www.co2deepstore.com

Project background material

The ScottishPower led Carbon Capture and Storage Consortium has been selected as one of the final bids in the UK Government’s carbon capture and storage competition. The design and development contract, awarded by DECC will enable engineers from the consortium, which comprises: ScottishPower, National Grid and Shell along with their contracting partners, Aker Clean Carbon and Accenture, to plan what could be the world’s first commercial scale CCS scheme to be fitted to a coal-fired power plant.

The companies are developing their design and engineering plans as well as costing every aspect of the project. These studies will be completed in time to submit detailed bids in early 2011. This will enable them to know precisely what it takes to capture and store CO2 from ScottishPower’s power station at Longannet in Fife, Scotland, and transport it hundreds of miles along existing pipelines, so that it can be stored safely in porous rock formations thousands of metres below the North Sea.

The collaboration between Government and industry in the development and deployment of CCS technology is an essential step in the drive to meet the UK’s CO2 emissions reduction target of 80% by 2050. Official studies show that the move towards a low-carbon economy, of which CCS is a vital part, will also create thousands of new jobs throughout the country over the next decade and beyond.

ScottishPower’s bid is based upon a retrofit project at Longannet power station. Last year the company switched-on a prototype carbon capture test unit at the power plant; the first time anywhere in the UK that carbon capture technology has been working on a coal fired power station. This has helped prove the chemistry of carbon capture and uses the same technology that can be retrofitted by 2014 as part of the UK Government’s CCS competition.

• The competition was launched in 2007 to encourage energy companies to develop commercially viable CCS schemes. There were originally nine entrants. The ScottishPower entry is one of two bids selected by DECC to enter the final stage of the competition before the contract to build the CCS system - which is expected to be awarded in 2011.

• The design and development study contract is also known as the Front End Engineering Design contract (FEED). It is standard practice for major industrial and engineering projects to carry out a FEED study before building work begins.

• Once operational the capture technology will reduce CO2 emissions by 90% from one 300MW unit at ScottishPower’s coal-fired plant. That would be equivalent to taking one million cars off the road.

• The ScottishPower Consortium is currently operating a carbon capture prototype at its power station at Longannet in Fife, Scotland. It was installed in May 2009.

• It is the only energy company in the UK which is capturing carbon on a working coal-fired power station. This programme is helping to prove the chemistry of carbon capture and uses the same technology that can be retrofitted to the tens of thousands of coal-fired power stations worldwide.

Petrofac

Petrofac is a leading international provider of facilities solutions to the oil & gas production and processing industry, with a diverse customer portfolio including many of the world’s leading integrated, independent and national oil & gas companies. Petrofac is quoted on the London Stock Exchange (symbol: PFC) and is a constituent of the FTSE 100 Index. 

The group delivers services through seven business units: Engineering & Construction, Engineering & Construction Ventures, Engineering Services, Offshore Engineering & Operations, Training Services, Production Solutions and Energy Developments.

Through these businesses Petrofac designs and builds oil & gas facilities; operates, maintains and manages facilities and trains personnel; enhances production; and, where it can leverage its service capability, develops and co-invests in upstream and infrastructure projects. Petrofac’s range of services meets its customers’ needs across the full life cycle of oil & gas assets.

With around 12,500 employees, Petrofac operates out of six strategically located operational centres, in Aberdeen, Sharjah, Woking, Chennai, Mumbai and Abu Dhabi and a further 19 offices worldwide. The predominant focus of Petrofac’s business is on the UK Continental Shelf (UKCS), the Middle East and Africa, the Commonwealth of Independent States (CIS) and the Asia Pacific region.

For additional information, please refer to the Petrofac website at www.petrofac.com.

Source: Golin Harris