_ This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 225484, “The UK’s First CO2 Transportation and Storage Project Takes FID, ” by Hans Sizoo, SPE, Ben Kek, and Alex Tait, BP, et al. The paper has not been peer-reviewed. _ In December 2024, the Northern Endurance Partnership (NEP) announced financial close and the start of the execution phase of the Teesside CO2 transportation and storage infrastructure project. The Teesside facility represents the first phase of The East Coast Cluster (ECC), a multibillion-pound investment representing a major development for carbon capture and storage (CCS) in Europe and globally. In this paper, the authors review lessons drawn from the many firsts on this project. The ECC: Linking Emitters to Subsurface Storage From 2015, a new CCS project emerged after two previous attempts at CCS in the UK were unsuccessful (detailed in the complete paper), centered on the east coast of the UK. The Teesside Collective was set up by energy-intensive companies working together to build a CCS-equipped industrial zone. The Clean Gas Project focused on gas-fired power with CCS to displace retiring coal-power generation to further decarbonize the UK electricity grid. A five-train, approximately 3. 4-GW system with 10-mtpa CO2-storage capacity had been developed and costed. The idea was further developed with the Teesside Collective, culminating in a single-train, approximately 0. 7-GW system with a 6-mtpa CO2-injection capacity, including pre-investment to enable expansion to three trains and capacity to take CO2 from other nearby industries. BP emerged as the operating services provider, rebranding the project as Net Zero Teesside (NZT), with the NEP as the CO2 transportation and storage provider. NEP is the focus of this paper. To leverage economies of scale, Teesside emitters, NEP, and Zero Carbon Humber joined to form the ECC. By 2021, the ECC comprised 28 emitters across bioenergy, industrial carbon capture, hydrogen, and power. Business Models: Allocating Value and Risk In response to a 2017 report, the UK government developed new business models. The key features of these models included the following: - Separate business models exist for CO2 transportation and storage projects and for CO2 capture projects. The business models for carbon capture vary by industry. Emitters finance their projects based on a subsidy provided by the Low Carbon Contracts Company to ensure economic viability. - CO2 transportation and storage projects are developed under a regulated asset base (RAB) model, a proven business model in the gas and electricity market. As a regulated business, NEP at final investment decision (FID) agreed upon a cost allowance and rate of return with the government. The project’s revenue is generated by the tariff charged to selected emitters; this tariff is set to deliver the negotiated return. Investors in NEP provide private capital to fund the project. The RAB provides certainty on future revenues that allows project financing by banks. - A government support package covers certain first-of-a-kind technical and commercial risks, such as stranded-asset risk or the very low probability of leakage of CO2 beyond that which can be addressed by normal planned preventative or reactive maintenance, or constraining the level of CO2 injection or the capacity of the store complex. - The network code sets out the commercial, operational, and technical arrangements between users (CO2 emitters) and operators of transport and storage networks, together with governance arrangements.
Chris Carpenter (Sun,) studied this question.