Exxon and Shell join Scottish carbon capture project

The Acorn carbon capture and storage project in north-east Scotland has signed provisional deals with customers including ExxonMobil, Royal Dutch Shell and a company backed by Kuwait’s sovereign wealth fund, bringing together some of the largest operators in the UK North Sea.

Acorn, which aims to be among the UK’s first large-scale operational CCS projects by the middle of this decade, plans initially to capture carbon from the St Fergus terminals where about a third of all natural gas consumed in the UK comes ashore.

The memorandums of understanding announced on Friday cover two of the three terminals at St Fergus, one of which is jointly owned by ExxonMobil and Shell. The other is owned by North Stream Midstream Partners, which bought the terminal and its main feeder pipelines in 2015.

NSMP is jointly owned by the Kuwait Investment Authority and the JPMorgan Infrastructure Investments Fund.

“Signing the MoU to begin this important work on the St Fergus CO2 emissions represents a key milestone for the Acorn Project,” said Nick Cooper, chief executive of Storegga, whose subsidiary Pale Blue Dot is leading the project in partnership with Shell and Harbour Energy, two of the largest producers in the UK North Sea.

“These emissions should be the first of many as we plan to scale the project to store more than 20m tonnes per year of CO2 emissions from Scotland, the UK and potentially Europe by the mid-2030s.”

The Acorn project has gathered pace in recent weeks with a majority of the largest operators in the North Sea, from oil and gas producers to refineries, now linked to the project.

It aims to join up a cluster of industrial hubs close to the North Sea that account for about 80 per cent of all Scotland’s industrial carbon emissions.

The Neccus Alliance, made up of energy companies, universities and Scottish government bodies, has laid out a road map to link up the carbon capture project at St Fergus to the nearby port of Peterhead and then Grangemouth to the west of Edinburgh.

The project also aims to produce hydrogen from natural gas to feed into the UK gas network, as governments look for lower-carbon fuels to complement renewable electricity under their plans to decarbonise.

Ineos, which operates Scotland’s Grangemouth oil refinery and petrochemical facility as well as the Forties Pipeline System that brings much of the North Sea’s oil and gas ashore, signed an MoU with the Acorn project last week.

Interest in CCS has soared as governments have made commitments to slash emissions to net zero by 2050 or before — Scotland is targeting 2045. Carbon capture involves stripping the CO2 from fossil fuels such as natural gas before storing it in repurposed oil or gas reservoirs at sea.

Other large-scale hubs are also under development on Teesside and the Humber.

Government backing, including the £1bn Carbon Capture and Storage Infrastructure Fund, aims to reduce the risk for private investors in the still nascent process. 

Exxon said the Acorn Project “has the potential to provide more than half of the 10m tons per year of CO2 storage targeted by the UK government”, with the potential for that to double “by the mid-2030s”.

The US energy major has come under pressure from investors to do more to address climate change, and in March set up its Low Carbon Solutions business “to commercialise low-emission technologies”.

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