Carbon capture and storage commercialisation - Premier Oil

Challenge

In 2021, the UK Government launched its Carbon Capture and Commercialisation Programme. The aim was to incentivise different industries to come together to offer fully integrated Carbon Capture of Storage (CCS) delivery where some of the risks associated with a ‘first of a kind’ project could be shared with the government.

Bidders were invited to compete for a share of £1bn of funding and additional support from electricity market reforms. Teesside Low Carbon (TLC) was a full chain CCS Project delivered by a consortium of companies. The scope was to build a 400MW coal fired power plant and use pre-combustion technology to capture 2.5 million tonnes pa of CO2 then transport the CO2 offshore for sequestration or use in Enhanced Oil Recovery (EOR).

Solution

SLR's role:

• Developed a risk management system to consider, manage and allocate integration risks across the full chain CCS project;
• Produced a contractual framework to deliver services from TLC participants across the full CCS chain;
• Advised on regulatory frameworks relating to CCS as well as third party access, monitoring obligations and liability;
• Identified options for offshore CO2 sequestration and identified potential mature oil North Sea oil fields which might benefit from CO2 EOR;
• Determined the potential extra oil recovery and evaluated economics of offshore CO2 EOR on specific mature North Sea oil fields.

Impact

• The project was one of four bidders shortlisted for a bid improvement phase. The government praised TLC for the highly developed thinking with respect to the commercial framework.
• The bid was unique as it offered potential value associated with EOR.
• The government selected two projects to take through to negotiating FEED Contracts and TLC was retained on the reserve list.