SSE and Equinor developing plans for hydrogen storage in West Yorkshire

 SSE Thermal and Equinor are developing plans for one of the world’s largest hydrogen storage facilities at their existing Aldbrough site on the East Yorkshire coast. The facility could be storing low-carbon hydrogen as early as 2028.

The existing Aldbrough Gas Storage facility, which was commissioned in 2011, is co-owned by SSE Thermal and Equinor, and consists of nine underground salt caverns, each roughly the size of St. Paul’s Cathedral. Upgrading the site to store hydrogen would involve converting the existing caverns or creating new purpose-built caverns to store the low-carbon fuel.

With an initial expected capacity of at least 320GWh, Aldbrough Hydrogen Storage would be significantly larger than any hydrogen storage facility in operation in the world today. The Aldbrough site is ideally located to store the low-carbon hydrogen set to be produced and used in the Humber region.

Hydrogen storage will be vital in creating a large-scale hydrogen economy in the UK and balancing the overall energy system by providing back up where large proportions of energy are produced from renewable power. As increasing amounts of hydrogen are produced both from offshore wind power, known as ‘green hydrogen’, and from natural gas with carbon capture and storage, known as ‘blue hydrogen’, facilities such as Aldbrough will provide storage for low-carbon energy.

Equinor has announced its intention to develop 1.8GW of ‘blue hydrogen’ production in the region starting with its 0.6GW H2H Saltend project which will supply low-carbon hydrogen to local industry and power from the mid-2020s. This will be followed by a 1.2GW production facility to supply the Keadby Hydrogen Power Station, proposed by SSE Thermal and Equinor as the world’s first 100% hydrogen-fired power station, before the end of the decade.

SSE Thermal and Equinor’s partnership in the Humber marks the UK’s first end-to-end hydrogen proposal, connecting production, storage and demand projects in the region. While the Aldbrough facility would initially store the hydrogen produced for the Keadby Hydrogen Power Station, the benefit of this large-scale hydrogen storage extends well beyond power generation. The facility would enable growing hydrogen ambitions across the region, unlocking the potential for green hydrogen, and supplying an expanding offtaker market including heat, industry and transport from the late 2020s onwards.

Aldbrough Hydrogen Storage, and the partners’ other hydrogen projects in the region, are in the development stage and final investment decisions will depend on the progress of the necessary business models and associated infrastructure.

The Aldbrough Hydrogen Storage project is the latest being developed in a long-standing partnership between SSE Thermal and Equinor in the UK, which includes the joint venture to build the Dogger Bank Offshore Wind Farm, the largest offshore wind farm in the world.

Stephen Wheeler, Managing Director of SSE Thermal, said: “We’re delighted to be announcing our plans for the development of this world-leading hydrogen storage facility with our partners in Equinor, which would play a vital role in creating a low-carbon hydrogen economy in the Humber and beyond. By delivering large-scale hydrogen storage capacity, we can utilise hydrogen to decarbonise vital power generation, as well as heavy industry, heat, transport, and other hard-to-reach sectors, safeguarding and creating crucial jobs and investment across the region.”

Grete Tveit, Senior Vice President for Low Carbon Solutions at Equinor, said: “Hydrogen will be crucial for the UK to reach its net zero ambition. That’s why we are pleased to be working together with SSE Thermal on developing plans to store low-carbon hydrogen at the Aldbrough site, bringing us and our partners in Zero Carbon Humber closer to our joint ambition to support the Humber region to become the UK’s first net zero carbon cluster. Projects such as these are critical for efforts to reaching the goals of the Paris Agreement and contributing to the UK’s goals to become a world leader in low carbon.”

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European gas prices hit decade highs

 

NBP is at 75p/therm (~33% increase YTD)

TTF is at €30.4/MWh (~65% increase YTD)

Despite the sharp rise in European gas prices and arbitrage opportunity for US LNG into Europe, LNG cargoes are being pulled to Asia where prices remain elevated and fetching premiums.

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Norway's offshore electrification grid

The Utsira High network powers a number of key fields on the Norwegian Continental Shelf including:

• Johan Sverdrup (Equinor)
• Edvard Grieg (Lundin)
• Ivar Aasen (Akerbp)
• Gina Krog (Equinor)
• Gudrun (Equinor)
• Sleipner (Equinor)

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BP close to selling Shearwater

NEWS: BP is rumoured to be close to finalising a sale of its 28% stake in the Shearwater field to Tailwind Energy, a North Sea explorer headed by ex-CNOOC veteran Steve Edwards and financing to be obtained from shareholder Mercuria.

BP has previously agreed to sell the asset to Premier Oil in 2020 but that deal fell through as a result of the collapse on oil prices and COVID-19. Premier Oil had also agreed to buy BP's Andrew asset at the time.

BP is also divesting the Andrew asset and it is understood that is being sold to another party.

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HyWind Scotland takes the crown for highest UK wind farm load factor

 

For its third consecutive year, Hywind Scotland – the world’s first floating offshore wind farm – reaches the highest average capacity factor for any wind farm in the UK.

With an average capacity factor of 57.1% in the twelve month period to March 2020, the floating offshore wind farm set a new record in the UK.

During its first two years of operation, the wind farm achieved an average capacity factor of 54%. That compares to an offshore wind average in the U.K. of around 40%. The capacity factor is the ratio of actual energy output over a given period of time, to the maximum possible output.  A higher capacity factor means lower intermittency and higher value.

With this top of the charts performance, the Equinor-operated wind farm has truly proven the potential for floating offshore wind, paving the way for the UK’s announcement of 1GW of floating offshore wind to be developed in the UK by 2030.

Equinor is the global leader in floating offshore wind. With Hywind Tampen onstream in 2022 Equinor will operate a third of floating offshore wind production worldwide.

“In Equinor we are constantly striving to improve the performance of our assets, whilst ensuring we extract learnings to support future projects. The turbines on Hywind Scotland are covered in sensors, to extract as much data from the wind farm as possible. We’re monitoring everything from ballast, mooring, structural strains and the more regular wind turbine sensor data, looking at how best to optimise this innovative technology as we prepare to develop at scale. We’re sharing parts of this data across industry to help the advancement of the technology globally and more widely than just our own operations,” says Sonja Chirico Indrebø, plant manager for Hywind Scotland and Dudgeon, the bottom-fixed wind farm off the coast of North Norfolk, who also can show to strong results.

Sebastian Bringsværd, head of floating wind development at Equinor, and Sonja Chirico Indrebø, plant manager for Hywind Scotland and Dudgeon.

As the first project of its kind, the Hywind Scotland wind farm has provided valuable data and results that will help drive the whole industry forward.

“It’s great to see the results Hywind Scotland and the floating technology keeps delivering. The potential for floating offshore wind is huge. With access to deeper waters and therefore higher and more consistent wind speeds, floating offshore is not only an efficient way to generate electricity from wind, this exciting technology can also provide jobs and value creation for the countries supportive of floating. In the UK alone, we are talking at least 17000 jobs and £33bn GVA by 2050. We believe Scotland has the potential to build a globally competitive offshore wind industry, including a real chance to enhance the development of floating offshore wind,” says Sebastian Bringsværd, head of floating wind development at Equinor.

As a global major in offshore wind with decades of experience in developing offshore energy - oil and gas, Equinor is uniquely placed to drive forward global deployment of floating offshore wind.

In 2009, Equinor installed the first ever floating offshore wind turbine, and Hywind Scotland followed in 2017 as the world’s first commercial floating offshore wind farm. It is now developing an even bigger project, Hywind Tampen, situated off the coast of Norway. This project, currently in construction, is on schedule to become the world’s largest floating wind farm as well as the first project ever to use wind energy to decarbonise offshore oil and gas production.

A recent report from ORE Catapult showed potential pathways for the growth and cost reduction for floating offshore wind.

Scale is key to cost reduction and Equinor has already seen a reduction in CAPEX per megawatt of 70% between its initial demonstrator, with a capacity of 2.3MW and Hywind Scotland, with a capacity of 30MW. The company expects a further 40% drop between Hywind Scotland and the 88MW Hywind Tampen.

“The global energy industry has been pleasantly surprised by the rapid decline in the cost to deploy fixed bottom offshore wind. We’ve been working on floating offshore wind for more than ten years and we see that significant cost reductions can be achieved through scale and experience, paving the way for floating to become fully commercialised”, says Bringsværd.

Original article link: https://www.equinor.com/en/news/20210323-hywind-scotland-uk-best-performing-offshore-wind-farm.html

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Tullow: Dry well offshore Suriname

 

Tullow had announced that the Goliathberg-Voltzberg North exploration well, on Block 47 (TLW 50%), offshore Suriname was drilled to a ~5,000m TD and encountered good quality reservoir but only minor oil shows.

The well will now be plugged and abandoned. Tullow operated the well and was partnered with Petroandina Resources and Ratio Suriname Limited.

This does not have a direct read across to Tullow's Guyana acreage but is clearly not helpful for sentiment, following a string of dry wells by Exxon in Guyana the latest of which being on the Canje block

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Equinor: all three UK low-carbon projects receive government funding to mature concepts

All three of Equinor’s projects to deliver deep cuts in emissions from industries and support clean growth on the UK’s east coast have received public funding from UK authorities. With a combination of private and public funding, Equinor and its partners will now progress these projects in order to create the world’s first net zero industrial cluster by 2040.

On 17 March 2021 the UK Government announced the funding awards under the UK’s Industrial Strategy Challenge Fund (ISCF) to three project consortia in which Equinor is directly involved:

• Zero Carbon Humber (ZCH), a twelve-company partnership to turn the UK’s largest industrial cluster net zero through the step-wise deployment of low carbon hydrogen, carbon capture and negative emissions being delivered at sites across the Humber estuary. The first project is the Equinor-led H2H Saltend low carbon hydrogen facility and a hydrogen and carbon dioxide (CO2) pipeline network across Humber industrial sites developed by National Grid Ventures.
• Net Zero Teesside (NZT), a five-company partnership to decarbonise the Teesside industrial cluster with carbon capture and build a new gas-fired power station with state-of-the art carbon capture technology.
• Northern Endurance Partnership (NEP), a six-company partnership (with ENI, National Grid, Shell, Total and operator bp) to develop offshore carbon dioxide transport and storage infrastructure in the UK North Sea that will serve both ZCH and NZT.

The three successful bids amount to GBP 229 million in private and public funding, with Equinor and its partners contributing more than two-thirds of the total.

“The shared challenge of climate change requires governments, industries and societies to come together. This funding award from the UK authorities shows this working in practice and we are delighted that these three pioneering projects have been successful. Working with our partners and stakeholders, Equinor will continue to apply our capabilities to deliver these projects, so together we can demonstrate the significant value that carbon capture & storage and hydrogen offer to communities and countries in a net zero future,” says Irene Rummelhoff, executive vice president for Marketing, Midstream & Processing in Equinor.

The funding awards from UK Research & Innovation and the funding from Equinor and its partners will be used in each project to move through the detailed engineering and design stages and progress to the point where, subject to the development in parallel of supportive UK policy, a final investment decision (FID) on each can be taken.

“The awards are great news for the UK and for Equinor. The Humber and Teesside make up nearly half of the UK’s industrial emissions so, to reach net zero, there is enormous value in tackling emissions at both clusters together. Rolling out carbon capture use & storage and hydrogen across the UK’s industrial clusters supports the Government’s aims for a green recovery and to level up by safeguarding and creating many high-skilled jobs, and will establish the UK as a world leader in hydrogen and low carbon technologies. As the UK’s leading energy provider, we will continue to work with our partners to progress our projects to final investment decision, engaging locally and nationally to make this happen,” says Grete Tveit, senior vice president for Low Carbon Solutions in Equinor.

In Norway, Equinor and its partners started construction work in January 2021 on Northern Lights, Europe’s first full-scale carbon transportation & storage project, following the Norwegian Parliament’s vote to approve funding in December. Construction is expected to be completed by late 2023 with the first phase operational during 2024.

Original article link: https://www.equinor.com/en/news/20210317-low-carbon-hat-trick-uk.html

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Hibiscus acquires 85% interest in Eagle to consolidate around Anasuria

Hibiscus has announced that its indirect wholly-owned subsidiary, Anasuria Hibiscus UK ('AHUK') has executed a Sale & Purchase Agreement ('SPA') with EnQuest in respect of certain interests in the UK Continental Shelf Petroleum Production Licence Number P238 Block 21/19a, Eagle Pre-Producing Area ('Eagle Field'). The Eagle Field is located approx. 6.4 km to 15 km from various Anasuria facilities, and due to its proximity, facilitates a potential subsea tie back to the Anasuria FPSO which could extend the latter’s economic life.

Under the terms of the SPA, the consideration for AHUK’s acquisition of 85% in the Eagle Field from EnQuest is a nominal USD1 due to EnQuest on SPA completion plus the the cost representing AHUK’s carry of EnQuest’s remaining 15% from completion of the SPA through to first oil. Such costs of the carry are presently estimated to be approx. USD7.5 million. The conditions precedent to completion are subject to customary regulatory and third party approvals. In addition, the terms of the deal include the transfer of operatorship of the licence to AHUK, according to the provisions to be contained in a Joint Operating Agreement between AHUK and EnQuest, which shall be signed at SPA completion

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Long awaited deal finally announced: NEO acquires ExxonMobil UK

NEO Energy and HitecVision have announced the signing of a transaction that puts NEO Energy among the top five oil and gas companies in the UK.

NEO Energy is acquiring a major portfolio of non-operated oil and gas assets in the Central and Northern North Sea from ExxonMobil. Following completion, NEO’s expected proforma 2021 production will be circa 70,000 barrels of oil equivalent per day (boepd), growing organically to more than 80,000 boepd in 2024 through ongoing field developments. NEO is acquiring a substantial, cash generative portfolio that will significantly increase and diversify its producing asset base. Adding close to 40,000 boepd and more than 140 million boe of reserves, it represents a major step towards NEO’s near-term target of producing 120,000 boepd.

The acquisition is an important milestone for NEO, supporting the company’s strategy of being a leading full-cycle E&P company on the UKCS. On completion of the transaction, NEO will have a strong presence in the key hubs in the Central and Northern North Sea, with total reserves and resources of around 300 million boe. The company will have a total of 35 fields both producing and under development.

The agreement is valued at more than USD 1 billion. There may be additional contingent considerations of approx. USD 300 million based on the potential for increases in commodity prices.

The assets include several organic growth opportunities, including ongoing development projects such as the Penguins field, infill wells and life extension opportunities. The total number of employees in NEO at closure of the transaction will be circa 160.

The fields being acquired are operated by some of the largest and most experienced offshore operators in the world including Shell, BP and Total. NEO will become Shell’s largest partner in the UK Central and Northern North Sea.

Russ Alton, CEO of NEO Energy, said:

'This acquisition builds on NEO’s existing North Sea portfolio and towards delivering on our ambition to be a leading producer on the UKCS. NEO is well placed, together with its operating partners, to extract value from this and other opportunities, while at the same time focusing on improved environmental performance.'

John Knight, Senior Partner at HitecVision, added:

'HitecVision is a leading investor in the European offshore energy industry with USD 6.7 billion in assets under management. We have built one of Norway’s largest oil and gas companies, through our joint venture with ENI, in Vår Energi. We believe that NEO has the potential to achieve a similar position in the UK sector to that held by Vår Energi in Norway. We will continue to fund NEO’s growth in the UK through more acquisitions and, where appropriate, mergers. This will be the first UK investment for our most recent fund, The  North Opportunity Fund, which we closed in March 2020.'

The transaction, which is subject to approvals from the relevant authorities and regulatory consents, is expected to complete by the middle of 2021.

The portfolio to be acquired consists of 21 assets, including 14 fields and a number of infrastructure positions. The fields can be divided into the following hubs:

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OGA launches full investigation into possible licence breach

The Oil and Gas Authority (OGA) has opened an investigation into a possible breach of reporting requirements under a licence. 

The investigation follows an Enquiry which concluded that there was sufficient evidence of a breach to go ahead.

The investigation will now among other things: 

• gather and assess further information to enable the OGA to reach a decision
• offer the company concerned the opportunity to provide written representations
• decide how the case should be resolved

The investigation follows the publication in October 2020 of the Thematic Review into Industry Compliance with Regulatory Obligations. 

The Review, which examined compliance in six areas of interaction between the OGA and licensees, identified some very good, and improving, practice, but also noted the need for further improvement and warned that sanctions could follow in cases where breaches were found. 

The Review itself followed a June 2019 OGA letter to licensees and infrastructure owners which outlined the OGA’s regulatory approach. While praising a great deal of constructive engagement, the letter noted that ‘too many issues [were] taking too long to resolve’ and warned that ‘we will be progressively more proactive in using the OGA’s powers’. 

Original article link: https://www.ogauthority.co.uk/news-publications/news/2021/oga-launches-full-investigation-into-possible-licence-breach/

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Partial electrification of Sleipner approved

The Ministry of Petroleum and Energy has approved a revised plan for development and operation (PDO) for partial electrification of the Sleipner field centre. The field centre will be tied to the Utsira High area solution, and Sleipner is expected to cut emissions by more than 150,000 tonnes of CO₂ per year.

“Partial electrification of the Sleipner field centre will contribute to major cuts in emissions from our activities and provide significant assignments for the supplier industry in a demanding time. As the authorities have approved the PDO, we can keep developing the Norwegian continental shelf (NCS) towards the goal of zero greenhouse gas emissions in 2050,” says Arne Sigve Nylund, executive vice president for Technology, Projects and Drilling in Equinor.

In June, Equinor and its partners Vår Energi, LOTOS and KUFPEC submitted a revised plan for development and operation (PDO) to the authorities. The investments are in the size of NOK 850 million. Sleipner is scheduled to be tied in to the Utsira High area solution by the end of 2022.

“Sleipner is an important field on the NCS contributing enormous value to Norwegian society. The partners have focused on being in the forefront of technology development and innovation to carry out for example carbon capture, injection and storage at the field. The decision to partly electrify the field helps the partners in their effort of further developing the field,” says Kjetil Hove, executive vice president for Development and Production Norway in Equinor.

Arne Sigve Nylund, executive vice president for Technology, Projects and Drilling in Equinor, and Kjetil Hove, executive vice president for Development and Production Norway in Equinor.

The Sleipner field centre solution involves laying a power cable from Sleipner to the Gina Krog platform, which will be tied to the power from shore Utsira High area solution.

The Utsira High area solution was originally planned for the four fields: Johan Sverdrup, Edvard Grieg, Ivar Aasen and Gina Krog. The Sleipner field centre and the Gudrun, Gina Krog, Utgard, Gungne and Sigyn tie-in fields will now receive power from shore through the area solution.

In June, Aibel was awarded the EPCIC contract (engineering, procurement, construction, installation and commissioning) for Sleipner modifications. The contract for production and laying of cables was awarded to the NKT cable supplier.

Worth around NOK 400 million, the EPCIC contract will require approximately 170 man-years distributed on two years at Aibel’s offices in Stavanger and at their yard in Haugesund. Purchase of equipment from sub-suppliers is expected to be in the size of NOK 150 million.

Sleipner licence partners: Equinor Energy AS (operator) 59.6%, Vår Energi AS 15.4%, LOTOS Exploration and Production Norge AS 15.0%, KUFPEC Norway AS 10.0%

Original article link: https://www.equinor.com/en/news/20210211-partial-sleipner-electrifiction-approved.html

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Equinor selected for largest-ever US offshore wind award

Equinor has been selected to provide New York State with offshore wind power in one of the largest renewable energy procurements in the U.S. to date.

Under the award, Equinor and incoming strategic partner BP will provide generation capacity of 1,260 megawatts (MW) renewable offshore wind power from Empire Wind 2, and another 1,230 MW of power from Beacon Wind 1 – adding to the existing commitment to provide New York with 816 MW of renewable power from Empire Wind 1 – totaling 3.3 gigawatts (GW) of power to the State. The execution of the procurement award is subject to the successful negotiation of a purchase and sale agreement, which the partnership looks forward to finalizing together with the New York State Energy Research and Development Authority (NYSERDA).

As part of the award by NYSERDA, the companies will partner with the State to transform two venerable New York ports – the South Brooklyn Marine Terminal (SBMT) and the Port of Albany – into large-scale offshore wind working industrial facilities that position New York to become an offshore wind industry hub.

“These projects will deliver homegrown, renewable electricity to New York and play a major role in the State’s ambitions of becoming a global offshore wind hub. The U.S. East Coast is one of the most attractive growth markets for offshore wind in the world. The successful bids for Empire Wind 2 and Beacon Wind 1 represent a game-changer for our offshore wind business in the U.S. and underline Equinor’s commitment to be a leading company in the energy transition. These projects will also create value through economies of scale and support our strategic ambition of becoming a global offshore wind major,” says Anders Opedal, CEO of Equinor.

“Together, Equinor and the State of New York will create a robust offshore wind supply chain capable of manufacturing, assembling, and staging these projects at scale. As Equinor works to expand its renewable energy presence across the United States and the globe, New York’s leadership clearly illustrates the transformative benefits of offshore wind on climate goals and economic activity alike. We are looking forward to developing Empire Wind and Beacon Wind together with local authorities, communities and our incoming partner bp in growing this new industry,” says Siri Espedal Kindem, President of Equinor Wind U.S.

Taken together, these offshore wind projects will help the State’s economic rebound and strengthen disadvantaged communities while helping the State achieve its nation-leading renewable energy goals.

ABOUT SOUTH BROOKLYN MARINE TERMINAL (SBMT)

Equinor will invest in port upgrades to help transform SBMT into a world-class offshore wind staging and assembling facility and become the operations and maintenance (O&M) base both for Equinor and other project developers going forward.

SBMT will be one of the largest dedicated offshore wind port facilities in the United States at approximately 73 acres, with the capacity to accommodate wind turbine generator staging and assembly activities at the scale required by component manufacturers.

ABOUT PORT OF ALBANY

Equinor will combine forces with established wind industry companies Marmen and Welcon at the Port of Albany to help the port become America’s first offshore wind tower and transition piece manufacturing facility, where it will produce components for Equinor’s projects.

The site, located in the State’s Capital Region, stands to become a go-to destination for future projects to source offshore wind towers, transition pieces, and other manufacturing components for many years to come as offshore wind continues to grow along the East Coast.

ABOUT THE ASSETS

Empire Wind is located 15-30 miles southeast of Long Island and spans 80,000 acres, with water depths of between 65 and 131 feet. The lease was acquired in 2017 and is being developed in two phases (Empire Wind 1 and 2) with a total installed capacity of more than 2 GW (816 + 1,260 MW).

Beacon Wind is located more than 60 miles east of Montauk Point and 20 miles south of Nantucket and covers 128,000 acres. The lease was acquired in 2019 and has the potential to be developed with a total capacity of more than 2.4 GW. This first phase will have an installed capacity of 1,230 MW.

In September 2020, Equinor and bp announced that they formed a strategic partnership for offshore wind in the U.S., and that bp will be a 50 percent partner in the Equinor-operated Empire Wind and Beacon Wind assets on the U.S. East coast. The transaction is expected to close in early 2021.

ABOUT EQUINOR

Equinor is developing into a broad energy company, building a material position in renewable energy. Equinor now powers more than one million European homes with renewable offshore wind from four projects in the United Kingdom and Germany. Equinor commissioned the world’s first floating offshore wind farm in 2017 off the coast of Scotland. In the U.S., Equinor holds two lease areas, the Empire Wind lease area located approximately 20 miles south of Long Island, and the Beacon Wind lease area that lies 60 miles off the coast of Long Island.

Original article link: Equinor selected for largest-ever US offshore wind award

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