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Equinor, partners see initial losses from Norway CO2 storage despite govt subsidies

Tue, 22nd Sep 2020 15:38

OSLO, Sept 22 (Reuters) - Norway's Equinor and its
partners Shell and Total will lose money on
the first phase of a carbon dioxide (CO2) storage project off
Norway despite government aid, the head of the project told
Reuters.

The Norwegian government said on Monday it would provide
16.8 billion crowns ($1.8 billion) in financial support for the
project, called Northern Lights, and two onshore CO2 capture
plants to advance the technology vital for reducing greenhouse
gas emissions.

"We are very pleased with the announcement from the
government. It's a historic decision and a game changer for
carbon capture and storage," Equinor's Sverre Johannesen Overaa,
who heads the project, told Reuters on Tuesday.

The Northern Lights project would be able to store 1.5
million tonnes of CO2 in the first phase, which is estimated to
cost 6.9 billion crowns. The government is expected to cover
about 80% of that.

"We are losing money on the first phase, but have strong
belief that we will be able to create a working business within
a few years," Johannesen Overaa said.

The project is expected to be close to break-even when
storage utilization reaches its full capacity of 5 million
tonnes per year, he added, though he did not specify when that
could be reached.

The planned storage facility already had at least 11
potential customers, he added, including two in Norway, and
could sign binding agreements with some next year.

Sweden's largest refiner Preem has said it could store up to
500,000 tonnes of CO2 per year at the Norwegian storage plant
from 2025, in addition to some 800,000 tonnes expected from two
sites in Norway.

The Northern Lights project had indicated in the market that
customers could be charged a fee of 35-55 euros per tonne of
CO2.

"I think by 2030 we should hopefully see that it is
operating as a regular business," Johannesen Overaa said.

($1 = 9.3272 Norwegian crowns)
(Reporting by Nerijus Adomaitis; Editing by Jan Harvey)

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