Carbon Capture and Storage

Horisont Energi: The North Star of Offshore Carbon Capture and Storage

Carbon capture and storage has been described as one of the critical technologies for slowing down global warming, and one company in Norway is set to act as the “North Star“ and lead the way in this effort.

By Bartolomej Tomic, Managing Editor,

Horisont Energi CEO Bjørgulf Haukelidsæter Eidesen was a panelist at the Baker Hughes annual conference in Florence, Italy.

Photo by Bartolomej Tomić
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Bjørgulf Haukelidsæter Eidesen established Horisont Energi in 2019, as he wanted to make something climate-positive at a large scale. The company discovered the Polaris reservoir in the Barent Sea, off northern Norway. It plans to use the offshore storage as a part of a larger Barents Blue project, which envisions converting gas on the Norwegian continental shelf into CO2-emission-free blue ammonia and storing the resulting CO2 under the seabed.

The plan had attracted the Norwegian majors Equinor and Vår Energi as potential gas suppliers for the project, with collaboration deals signed in 2021.

Apart from the Polaris Project, Horisont Energi is also working on another pure-play CO2 storage project in Norway, the Errai, in the North Sea. [NOTE: Horisont Energi and Neptune have yet to obtain the rights to the Errai offshore site, but Eidesen remains confident it will get the deal done.]

OE caught up with Eidesen on January 30, 2023, in Florence, Italy, on the sidelines of the Baker Hughes Annual Meeting.

In the conference's opening remarks, Baker Hughes CEO Lorenzo Simonelli said: "As we look at the future, there is no future where hydrocarbons don't play a role in the energy mix for the decades to come. Let's focus on [reducing] emissions, and not on the fuel source."

This, Eidesen believes, is an area where Horisont Energy can help.

Did you know?

Both projects - Polaris and Errai - are named after a “North Star.“ The current North Star is called Polaris, and the Errai will succeed the Polaris as the Earth's northern pole star in a couple of thousand years.

In discussing Polaris, Eidesen said that the Norwegian Petroleum Directorate had scanned the entire shelf to determine which types and formations could be fit for CO2 storage. “We looked at their work and identified the Polaris structure,“ Eidesen says. He says that the Polaris is a “ very nice structure,“ with all the things one could be looking for from a potential CO2 storage reservoir, including a nice cap rock, to ensure containment. The conservative estimate for the CO2 storage capacity of Polaris is "about 100 million tons," the equivalent to twice Norway’s annual greenhouse gas emissions, "but could be much bigger," according to Eidesen. In order to verify the true capacity, the company needs to start filling the reservoir with CO2. The plan is to build the ammonia production plant on the coast in Norway's north near the Polaris reservoir and pump the CO2 into it via a pipeline.

Horisont Energi CEO Bjørgulf Haukelidsæter Eidesen, in discussing the business case for CO2 storage. Photo by Bartolomej Tomić

We have the Emission Trading System (ETS) which imposes a fee for emitting CO2 [a price which currently has been between 80 and 100 euros per ton of CO2. The price is forecast to be between 150-170 euros per ton of CO2 in 2030.] This represents a financial risk to emitters of CO2.

Vår Energi & Equinor Pull Out; Fertiberia is 'In'

Back in December 2021, announcing the pact with Vår Energi and Equinor for the Polaris CO2 storage development, Horisont Energi said that an investment decision for Polaris and the Barents Blue project was expected to be reached around year-end 2022.

However, on the morning on February 1, 2023, a day after our interview with Eidesen in Italy, Equinor and Vår Energi issued press releases announcing their withdrawal from the project. Simultaneously, Horisont Energi issued a statement welcoming a new partner to the project: Spanish ammonia producer Fertiberia.

While some described the withdrawal of Vår Energi and Equinor as a setback for the project, Equinor said it was still “positive“ about finding ways to get gas from Hammerfest LNG to the Barents Blue project.

Vår Energi, which had planned to export gas resources discovered in Alke and Goliat fields, west of Hammerfest, via a tie-in to the Barents Blue project, said it would seek other solutions, as “development of the proven resources in the region, including Goliat, Alke and Lupa, will require an export solution with greater capacity than what we deem realistic within the scope of the [Barents Blue] project.“

In a statement announcing the partnership changes, Eidesen praised Vår Energi and Equinor for having been “instrumental in maturing the project in the development phase ending January 31.“

Horisont Energi also said it would invite new partners into the Polaris CO2 storage license, including a qualified operator. “A new license group will bring the project forward to a submission of plan for development. The changes in the license group will be coordinated with relevant authorities," the company said on February 1.

Why pay to store CO2?

In the current political climate, multiple industries face escalating costs for carbon emissions, so securing CO2 storage at fixed costs is a hedge.

“In the current European industrial system, you have a mechanism for pricing CO2 emissions,“ said Eidesen. “We have the Emission Trading System (ETS) which imposes a fee for emitting CO2,“ a price which currently has been between 80 and 100 euros per ton of CO2.

Eidesen said the price is forecast to be between 150- 170 euros per ton of CO2 in 2030. “So you can say this represents a financial risk to emitters of CO2, that they cannot control what the cost will be.“

According to Eidesen, storing CO2 in, say, Errai, puts a cap on how high the price can go, providing some degree of financial certainty.

In addition to cost, Eidesen said there are other drivers. “Other customers are motivated by the fact that they want to deliver carbon-neutral products to their customers. Their customers demand decarbonized value chains. They can get more value for the product if it's decarbonized.“

In November 2022, Horisont Energi also signed a letter of intent with E.ON, for the latter to store more than one million of CO2 a year from its European customer sites. This would take effect starting from 2027, with gradual increase. Horisont Energi will provide services on CO2 marine transport and long-term storage.

Horisont Energi plans to store four to eight million tons of CO2 annually in the first development phase of the Errai project, potentially storing more in later phases.

Asked about the Errai capacity, Eidesen said “We have estimated the P90 to 185 million tons of storage capacity. So it's bigger than Polaris in the respective case for the P90.“

Horisont Energi in January signed an option agreement with Haugaland Næringspark to locate the land- based CO2 terminal for the Errai carbon capture and storage project to Gismarvik in Rogaland, where Haugaland Næringspark has one of Norway’s largest industrial areas. The CO2 terminal will receive CO2 from European and Norwegian customers, including the planned CO2 terminal in the Port of Rotterdam.

The European Emissions Trading System: What you need to know:

January - February 2023