UK selects Viking, Acorn CCS projects for start by 2030

Spanish Market: Crude oil, Emissions, Hydrogen, Natural gas
31/07/23

The UK government has added the Acorn and Viking carbon capture and storage (CCS) projects to its 'Track 2' process, which aims to start up two further CCS clusters by 2030.

The government will "commence engagement, assessment of delivery plans and due diligence" with the developers, it said today. Acorn and Viking represent the transport and offshore CO2 storage elements of their respective CCS clusters. The government plans to set out how capture projects, which will link to these, will be eligible for Track 2 "in due course", it said today.

Viking, in northeast England, could transport and store up to 10mn t/yr of CO2 by 2030 and 15mn t/yr of CO2 by 2035, with storage capacity of 300mn t/CO2 across the depleted Viking gas field. Acorn, in northeast Scotland, could store "at least" 5mn t/yr of CO2 by 2030, the partnership said.

Acorn is a joint venture comprising UK decarbonisation firm Storegga, Shell, UK upstream firm Harbour Energy and energy infrastructure business North Sea Midstream Partners. Harbour operates the Viking project, in which BP acquired a 40pc stake in April.

The Track 2 decision will enable both developments to "move into front end engineering and design and discussions with the government over the terms of the economic licences, ahead of final investment decisions", Harbour said today.

The government called for applications under its Track 2 scheme on 30 March, although it noted at the time that the Acorn and Viking projects are "best placed to deliver on the government's objectives". The UK aims to capture and store 20mn-30mn t/yr of CO2 by 2030 and the government has committed £20bn ($25.7bn) of funding for carbon capture, usage and storage (CCUS) over 20 years.

The Track 1 clusters — HyNet and East Coast — have target start dates of the mid-2020s. Acorn will remain on the reserve list for Track 1, should HyNet or the East Coast clusters encounter "significant delivery challenges", the government said.

The government will "publish a vision" for the UK's CCUS sector later this year, it said today.

"Engagement with industry about future plans will continue", it added.

By Georgia Gratton

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23/12/24

Japan’s Chugoku restarts Shimane nuclear reactor early

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Viewpoint: Europe’s refiners eye support from closures

23/12/24

Viewpoint: Europe’s refiners eye support from closures

London, 23 December (Argus) — Another tranche of European refining capacity will close for good next year, but the reprieve for margins in the region may only be temporary. Nearly 400,000 b/d of capacity, around 3pc of Europe's total, is scheduled for permanent closure in 2025, comprising Petroineos' 150,000 b/d Grangemouth refinery in Scotland, Shell's 147,000 b/d Wesseling refinery in Germany and a third of the capacity at BP's nearby 257,000 b/d Gelsenkirchen refinery . Around 30 refineries have closed in Europe since 2000. Among the most recent was Italian firm Eni's 84,000 b/d Livorno refinery in northern Italy earlier this year. And only this month, trading firm Gunvor announced it is mothballing its small upgrading refinery in Rotterdam . The Rotterdam facility had already stopped processing crude in 2020, leaving it peculiarly exposed to the margins between intermediate feedstocks and finished fuels. The refinery has been hit by a 25pc increase in operating costs in the last four years and a squeeze on margins, the latter the result of competition from new refineries outside the region, Gunvor said. Outside Europe, the world has added more than 2.5mn b/d of crude distillation capacity in the last three years. Three brand new refineries have come on stream in the Middle East in that time — Saudi Arabia's 400,000 b/d Jizan, Kuwait's 615,000 b/d Al-Zour with Oman's 230,000 b/d Duqm refineries. More recently, Nigeria's 650,000 b/d Dangote refinery, Mexico's 340,000 b/d Olmeca refinery and Yulong Petrochemical's 400,000 b/d refinery in China's Shandong province started up, all of which are likely to ramp up throughput in 2025. Refinery closures tend to support margins for those that remain. But European refiners' costs continue to rise while demand for their products falls, which means next year's closures are unlikely to be the last. Simpler and smaller refineries are prime candidates for closure as they usually achieve weaker margins. Europe also has plenty of refineries built before 1950 that are still running. These older plants can be more at risk of accidents and breakdowns. And repairs can sometimes cost so much that they tip a refinery into the red. An ongoing concern for European refiners is the trend towards lighter and sweeter crude slates , driven by supply-side dynamics, which is resulting in higher naphtha yields at a time when demand for naphtha from Europe's petrochemical sector is under pressure from a contraction in cracking capacity. But many in the market expect the greatest pressure in 2025 will fall on those coastal refineries in Europe that were built to maximise gasoline output. If, as expected, Dangote continues to shrink Nigeria's demand for gasoline imports , these refineries will be hit hardest. Any refinery that cannot desulphurise all of its gasoline output to the 10ppm required for UK or EU usage will be under intense pressure, as west Africa is presently among the only outlets for European high-sulphur gasoline. Strike support One of the strongest supports for European refining margins in 2025 could come in the form of industrial action if new capacity cuts or closures were to be announced. Refinery workers in the region have shown willing and able in the past to organise large-scale strikes, most emphatically in France. The highest diesel refining margins Argus has ever recorded came in October 2022, when the entire French refining system was shut down by strikes. Another trend to watch out for next year is the continuing shift in the ownership structure of Europe's refining sector. The large integrated oil companies that have dominated the industry for so long have been steadily selling European refining assets to independents and trading firms. The latter are nimbler and able to cut costs more ruthlessly. And with many of them not publicly listed, they are less susceptible to pressure regarding their environmental footprints. There could be more instalments in this story in 2025. Sweden's Preem started accepting bids for its Swedish refining assets in the summer of 2024 and Russia's Lukoil is considering bids for its Burgas refinery in Bulgaria. By Benedict George Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US House votes to avert government shutdown

20/12/24

US House votes to avert government shutdown

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Brazil Bndes invests more in Sao Paulo EV fleet

20/12/24

Brazil Bndes invests more in Sao Paulo EV fleet

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US government agencies set to shut down

20/12/24

US government agencies set to shut down

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