Awarding four new licenses for CO2 storage on the Norwegian continental shelf

‘The government is committed to facilitate 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. Today's 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 licences that have been offered are located in the North Sea. Two of the licences are offered to Equinor ASA. One licence is offered to a group consisting of Vår Energi ASA, OMV (Norge) AS and Lime Petroleum AS, and one licence is offered to a group consisting of Aker BP ASA and PGNiG Upstream Norway AS.

The licences are offered with a binding work program which includes mileposts that ensures 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 for new storage space by several players in the industry, makes me optimistic for the future work of making CO₂ storage one part of the solution to the worlds’ climate challenges’, said Aasland.

More information, maps and work program can be found on the Norwegian Offshore Directorate’s webpage.

Background

Activities aimed at surveying and exploring for 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 5th December 2014 no. 1517).

Anyone who is conducting such storage operations needs a permit in accordance with the regulations. In addition, on February 20th, 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 are facilitating the socio-economically profitable storage of CO₂ on the Norwegian continental shelf. Companies that have the necessary expertise and that have specific, industrial plans that entail a need for storage on a commercial basis can apply to the Ministry of Petroleum and Energy for a licence 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 transportation and storage of CO₂ into subsea reservoirs on the continental shelf, the ministry normally expects to award an exploration licence prior to awarding an exploitation licence in a relevant area. Exploration licences can be awarded to one or more competent companies. If a licence is awarded to several companies, the ministry will, generally, appoint one of the companies as operator.

The award of exploration licences will normally be done with a work program including one binding phase and subsequent conditional phases with decision points for the 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 a storage, and that they then submit a plan for development and operation (PUD) for the storage location or relinquish of the area.