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Norway to terminate Mongstad carbon capture programme

27 September 2013

The Norwegian oil and energy ministry has announced the development of full-scale carbon dioxide capture at Mongstad had been discontinued because of cost overruns and delays. Statoil, which is in charge of the project, said that it has taken note of the decision and is now beginning work in order to ensure a smooth project conclusion.

Part of the Mongstad site - Photo: Statoil
Part of the Mongstad site - Photo: Statoil

The government’s CCS programme had been criticised by the nation’s Auditor General, who said the Mongstad project was 1.7 billion kroner (200 million euros) over budget, according to a statement on September 17. In total, the government said it has spent about 7.2 billion kroner (900 million euros) on carbon capture, including 1.2 billion kroner on the full scale project.

“The investigation shows that the complexity of implementing CCS was underestimated in 2006,” the auditor said. “Among other things, it has proven very difficult to plan and build capture facilities on a large scale near a refinery and heat and power plant in operation. This has entailed high costs and a longer implementation period.”

The project involved the construction of a power plant at Statoil’s Mongstad refinery and was approved by the government in 2006. The company was given permission to emit carbon dioxide from the plant between 2010 and 2014, when a full-scale carbon capture and storage system had to be in place. Together with partners Gassnova, Shell and Sasol, the company completed the Technology Centre at Mongstad (TCM) for carbon capture technology in 2012.

The project was being developed in two phases to reduce technical and financial risk. Phase 1 included capturing at least 80,000 tonnes of CO2 using chilled ammonia and 20,000 tonnes of CO2 with amine technology. A government decision for the larger scale phase 2 which would see the plant capture 1.5 million tonnes a year of CO2, was due shortly.

For several years, Statoil numbered among the leading companies working on CCS. The carbon storage on Sleipner was the first large-scale storage in the world. In addition, the company has been involved in full-scale capture and storage at In Salah in Algeria, as well as on the Snøhvit field in Norway. Besides its Mongstad activities, the company is also involved in extensive research projects devoted to the development of carbon capture technology, which also include storage.

CCS is one of the most important technologies in the worldwide effort to reduce carbon emissions from industry and from power production. The Government insists that much has been learned from the Mongstad project and Norway will continue investment in CCS at different sites.

The closure has caused serious political waves in Norway, where newspaper Dagens Næringsliv reported that the government had decided on a shutdown last spring but failed to announce the decision until now to improve the chances of one of the coalition parties in the recent elections.

Trine Skei Grande, leader of Norway’s Liberal Party (Venstre) which has an ambitious environmental platform, has called for an international investigation into how the outgoing left-centre government has handled the Mongstad project. Grande is currently involved in negotiations to form a new Conservative-led coalition government.

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