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UK government signs contract with Shell on next stage of Scottish CCS project

24 February 2014

On February 24 the Department for Energy and Climate Change (DECC) announced the signature a multi-million pound front-end engineering design (FEED) contract with Shell to take the Peterhead gas carbon capture and storage (CCS) project into the next stage of development.

Peterhead Power Station - Photo: Shell
Peterhead Power Station - Photo: Shell

The world’s first planned gas CCS project, Peterhead involves installing carbon capture technology onto SSE’s existing Peterhead gas power plant, and transporting the CO2 100km offshore for safe, permanent storage 2km under the North Sea in the depleted Goldeneye gas field.  If built, the project could save 1 million tonnes CO2 each year and provide clean electricity to over 500,000 homes.

The project also opens a potential new future for the North Sea - turning old oil and gas fields into CO2 stores, offering the possibility of using CO2 for Enhanced Oil Recovery and giving new opportunities for the UK’s world leading offshore and subsea industries.

Today’s announcement follows the award in December of a FEED contract to the White Rose project in Yorkshire, and marks a key milestone in the Government’s CCS Competition. We are investing around £100m from our £1bn budget to take the Peterhead and White Rose CCS projects to the next stage of development – which together could support over 2,000 jobs during construction and provide clean electricity for over 1 million homes.

DECC says that CCS could save more than £30bn a year by 2050 by facilitating an affordable, low carbon energy mix.

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