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Shell and SSE Win U.K.’s First CCS Seabed Licence

19th July 2012

In a UK first, Shell and SSE have been granted approval on their carbon capture and storage (CCS) project, to store carbon dioxide under the seabed.
The Crown Estate, which manages the seabed on behalf of the monarchy, announced in a statement that an “agreement for lease (AfL) for the permanent geological storage of carbon dioxide” was “signed with the Peterhead CCS Project (Shell UK Limited and SSE CCS Limited) at the offshore depleted Goldeneye gas field, located in the North Sea 65 miles from St Fergus, north east Scotland. This agreement will see carbon being pumped from the 385MW gas-fired power plant in Peterhead to Goldeneye.

Started this year by The Crown Estate, owner of the storage rights on the UK continental shelf; the programme will allow CCS project developers to apply for AfL’s across potential storage sites. The AfL’s offer companies exclusive time-limited opportunities to progress their CCS projects through to final investment decisions.

The Crown Estate said the project “is seeking funding under the UK Government’s commercialisation programme for carbon capture and storage (CCS).” Peterhead is contending for £1 billion of funding through the programme. This would put the U.K. on track to reduce emissions in half by 2027 and strip carbon out of the electricity generation industry. Alstom SA and Drax Group Plc. are also competing for the funds.

“We see CCS as an important technology in helping manage climate change and security of energy supply issues as part of the various ways of continuing to deliver power and industrial processes to the UK with low or zero emissions. Much work still has to be done to progress CCS and in particular transport and storage infrastructure. We look forward to working with those developers who are successful in the UK Government’s commercialisation funding competition to begin the delivery of this infrastructure.” The Estate said.

The value of the deal has not been disclosed either of the parties involved.