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    Norway to Spend more on CCS Technology

Summary

With revenues expected to be up a third next year the government is looking at spending more on CCS and seismic acquisition.

by: William Powell

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Natural Gas & LNG News, Europe, Corporate, Exploration & Production, Investments, Political, Ministries, News By Country, Norway

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Norway to Spend more on CCS Technology

Norway's net cash flow from the petroleum industry in 2019 is estimated to be about Nkr 286bn ($35bn), up by 34% on the forecast for this year thanks to higher prices, the petroleum ministry said October 8.

Geological surveys and carbon capture and storage (CCS) research will both see some of this extra cash, with Nkr 50mn more going on seismic acquisition and NKr 670mn going on carbon capture and storage project (CCS), an increase of Nkr 160mn on this year. The proposal includes funds for continuing the work on a full scale CCS project in Norway. The government also proposes to increase the funding for Technology Centre Mongstad (TCM) owing to its increased activity.

Petroleum minister Kjell-Borge Freiberg said October 8 that both the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) said that CCS was necessary in order to cut global greenhouse gas emissions at the lowest possible costs. The IPCC said though in its October 8 report that CCS on its own would not be enough.

The planning of a new full scale CCS project in Norway continues. The government proposes to allocate Nkr 175mn to his work in 2019. The government earlier this year decided to fund front-end engineering and design (Feed) studies of CO2-capture at two sites: Norcem's cement plant in Brevik and at Fortum Oslo Varme's waste incineration plant in Oslo. An investment decision may be taken in 2020/2021 and will need parliamentary approval.

Equinor, Total and Shell are co-operating on the studies of CO2-transport and storage, which will be continued as planned into Feed studies in 2019.

The government proposes to increase the funding of Technology Centre Mongstad to Nkr 208mn in 2019, an increase of Nkr 13mn compared to 2018, because of its increased activity. TCM is the world's largest facility for testing and improving CCS technologies and its knowledge and experience is also valuable for the planning of a new full scale CCS project in Norway.

The state's total income stream includes direct and indirect taxes; revenues from the state’s direct financial interest (SDFI) in licences; and dividends from state-controlled producer Equinor. 

Petroleum industry investments, including exploration and decommissioning costs, are estimated at Nkr 176bn in 2019, compared with this year's Nkr 155bn.

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