NORWEGIAN CCS COST TRIPLES. TROUBLE WITH CAPTURE AND STORAGE

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22 april 2010

COST OF NORWEGIAN CCS PROJECT SOARS TO E1.3BN

ENDS Europe DAILY, Thursday 22 April 2010

The estimated cost of one of Norway's two flagship carbon capture and
storage (CCS) projects has tripled over the last two years, according
to Sigve Apeland from Norwegian state-owned firm Gassco, which
operates gas pipelines off the coast of Norway.

Capturing, transporting and storing 1.1 million tonnes of CO2
annually from the Naturkraft gas-fired power plant at Karsto will
require about NOK 10.4bn (E1.3bn), Mr Apeland told journalists last
week on a press trip organised by the ONS Foundation.

This compares to a required capital expenditure of NOK 3.5bn (E0.5bn)
estimated in late 2007. "The CCS costs are big and higher than we
initially thought," he said. Gassco transports gas from the Norwegian
continental shelf to Europe.

The bulk of the cost is tied to the capture stage. Changes in
technology probably account for most of the extra price tag, a Gassco
spokesperson said. She also noted that the two cost estimates have
different origins: the latest one is from Gassnova, a state
enterprise dedicated to CCS, and the initial one from Norway's energy
ministry.

EU officials told ENDS they were surprised by the soaring costs at
Karsto. They have not heard of similar cost increases in the past
year for CCS projects supported by the EU. Mark Johnston from green
group WWF concurred. A recent Joint Research Centre report puts the
costs of CCS at about two-thirds of the latest Karsto estimate.

Liv Monica Stubholt, investment director at Aker ASA, an industrial
investment company, says CCS-related research is 80% focused on
reducing energy demand in carbon capture. Storage does not need a lot
of further ground-breaking research, she added. It is primarily a
public acceptance issue.

Nevertheless, StatoilHydro's Snoehvit project in the Barents Sea,
which emitted much more CO2 than expected at its start two years ago
due to technical problems, is today tackling higher than expected
pressure in its CO2 storage underground. Engineers will use dynamite
to increase the permeability of the store, a spokesperson said.


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