Shell and SSE's carbon capture and storage (CCS) project has secured the UK's first licence to store CO2 offshore under the seabed.

An agreement for lease (AfL) was announced yesterday with The Crown Estate, confirming that carbon from the 385MW gas-fired power plant in Peterhead can be pumped to Shell's depleted Goldeneye gas field, located 65 miles off the coast of north east Scotland.

The award is the first under a programme brought in this year by The Crown Estate that will allow CCS project developers to apply for AfLs over potential storage sites.

The AfLs provide exclusive time-limited options that enable companies to progress their CCS projects through to final investment decisions.

In a statement, The Crown Estate, which manages the seabed on behalf of the monarchy, said it has received several requests for options over sites, of which seven have been made public.

It added that it expects to announce more contract awards from this summer onwards.

The UK is considered a prime spot for CCS because of the large amount of potential storage space in depleted oil and gas fields in the North Sea.

The government envisages the country could host an industry worth £6.5bn a year by the 2020s and is soon to announce which projects will be awarded funding under its £1bn CCS commercialisation competition.

The Peterhead project remains in the running although its prospects of winning a share of an alternative €1.5bn (£1.18bn) EU funding pot appear slim. A report published by the European Commission last week ranked it on the reserve list behind nine other projects, including four from the UK, of which most would have to drop out before Peterhead became eligible.

Source: BusinessGreen, by BusinessGreen staff  

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