Awarding two new licences for CO2 storage on the Norwegian continental shelf

‘Norway has a unique opportunity to take a leading role in large-scale commercial CO₂ storage in Europe. The government is committed to making CO₂ storage a profitable and sustainable industry in Norway. Today's awards are an important step in ensuring that the entire value chain is in place, so that our ambitious plans can be realised,’ said Minister of Energy Terje Aasland.

The two exploration licences offered are located in the North Sea. One of the licences is offered to a group consisting of Harbour Energy Norge AS (operator) and Equinor Low Carbon Solution AS, the other licence is offered to a group consisting of Equinor Low Carbon Solution AS (operator) and Aker BP ASA.

The permits are offered with a binding work programme, with built-in milestones to ensure efficient progress, or relinquishment of the acreage if the licensees do not complete the storage project.

‘These exploration licences are offered to companies that have presented good plans for the development of CO₂ storage. A number of players in the industry have shown interest in new storage areas. This makes me optimistic about further progress in the work to make CO₂ storage part of the solution to the world's climate challenge,’ said Aasland.

More information, maps and the work programme are available on the Norwegian Offshore Directorate’s website.

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.