Energy integration in action: Eni project awarded carbon storage licence

8 October 2020 - The Oil and Gas Authority (OGA) is pleased to announce it has awarded a carbon dioxide (CO₂) appraisal and storage licence (CS licence) to Eni UK Limited (Eni). 

The CS licence will cover an area located within the Liverpool Bay area of the East Irish Sea. Under the CS licence, Eni plans to reuse and repurpose depleted hydrocarbon reservoirs (the Hamilton, Hamilton North and Lennox fields) and associated infrastructure to permanently store CO₂ captured in NW England and N Wales. 

The application for a CS licence was made by Eni in order to help address the decarbonisation needs of NW England and N Wales and aims to be part of a collaborative effort with industrial companies to capture and transport CO₂ from existing industries and future hydrogen production sites for fuel switching, heating, power and transportation in the context of UK targets for net zero emissions by 2050. 

Eni expects the project to benefit local communities by creating new job opportunities and assist to develop the economy of the area whilst providing a tangible pathway to energy transition and decarbonisation. 

Dr Andy Samuel, Chief Executive of the OGA said: “The OGA is very pleased to award this licence for what we hope will be a highly successful project. The Energy Integration work we’ve been leading shows that the combination of various energy systems, including carbon capture and hydrogen, can make a significant contribution to the UK’s net zero 2050 target. HyNet is an exciting example of energy integration in action – re-using existing infrastructure and depleted reservoirs for significant carbon storage, coupled with hydrogen generation for a variety of innovative uses.” 

Claudio Descalzi, Eni Chief Executive commented: “I’m delighted and proud to announce the award of the licence CS004 for carbon storage in the UK, first licence of its kind for Eni. This is a vitally important project for Eni and represents a milestone for the 2050 Net Zero ambitions of the UK and a fundamental pillar for the strategy of energy transition and decarbonisation that Eni is strongly committed to.” 

Eni has been awarded a CS Licence with a six-year ‘Appraisal Term’, allowing assessments and planning that may lead to a subsequent application to the OGA for a storage permit and the associated approvals required prior to any CO₂ storage operations commencing. 

Notes to editors:

• Carbon capture and storage (CCS) refers to a number of techniques and processes which capture carbon dioxide emissions, generally from industrial processes. The CO₂ can then be transported, including via repurposed gas pipelines, and stored, for example in underground locations within the rock formations below the East Irish Sea. 
• Details about the the HyNet carbon capture and hydrogen generation scheme can be found at https://hynet.co.uk/
• The ‘Appraisal Term’ is six years, however an application for a storage permit can be submitted at any time during the Appraisal Term and will be subject to appropriate assessments and evaluations. 
• The OGA is the licensing authority for offshore carbon dioxide storage in the UK, approving and issuing carbon dioxide storage and appraisal licences, storage permits, and maintaining the carbon storage public register. 
• It should be noted that the licences do not convey permission for development activities including drilling and injection testing: these require further consents from the OGA. 
• Certain activities proposed under CS licences may also be subject to specific environmental assessment by BEIS (Offshore Petroleum Regulator for Environment and Decommissioning (OPRED)).
• A licensee also requires a lease from the Crown Estate/Crown Estate Scotland (as applicable) before undertaking storage activities. 
• The OGA also asks petroleum licence operators, as part of approving any cessation of production plans, to show that they have considered economic development opportunities, including the CCS potential, for any infrastructure. 
• In addition, the OGA is a statutory consultee to the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), in relation to operators’ decommissioning plans, in particular whether reuse opportunities or potential has been considered. 
• BEIS leads government policy on CCS.