Norwegian oil and gas companies Equinor and Var Energi said Wednesday they were leaving Horisont Energi's Barents Blue project, which is designed to make ammonia from natural gas from the Barents Sea, capture the CO2, and store it under the seabed. In parallel, Horisont Energi has welcomed Spanish firm Fertiberia as a new partner for the project.
The previous partners, Equinor and Vår Energi, said they would leave the project as the cooperation agreement expired on January 31.
The Polaris CO2 storage under the Barents Sea was selected as the CO2 storage solution for the Barents Blue project, and it has had the same partners as the Barents Blue project.
"Consequently, Equinor has also concluded to not take further part in the Polaris CO2 storage project," Equinor said.
“We are pleased to see that Horisont Energi will continue to mature the Barents Blue project with a new partner and build on the progress and experiences from our partnership."
"I wish to thank the Barents Blue operator Horisont Energi and our partner Vår Energi for the collaboration we have had in the project”, says Grete Tveit, senior vice president Low carbon solutions, in Equinor.
After the changes in the partnership, Equinor said it was still "positive" about finding ways to get gas from Hammerfest LNG to the Barents Blue project.
Equinor has several hydrogen and CCS projects in different phases in Norway and in other markets. In Norway, the Northern Lights CO2 transport and storage project, part of the Longship project, is already under construction and on track to be ready to receive CO2 in 2024.
Recently, Equinor and RWE announced that the companies have agreed to work together to develop large-scale value chains for low carbon hydrogen, with a production facility in Norway and an export pipeline to Germany.
By 2030, Equinor has an ambition that 50 per cent of the company’s gross investments will be dedicated to renewables and low carbon solutions, such as CCS and hydrogen.
Vår Energi - Work to find export solution continues
Var Energi said the decision to withdraw would not impact its position in the Barents Sea, and the work to find a comprehensive gas export solution continues.
"In recent years, Vår Energi has investigated various alternatives for exporting the gas resources discovered in Alke and Goliat, west of Hammerfest. The company decided to join the Barents Blue collaboration project in 2021, following efforts initiated by Equinor and Horisont Energi to establish an ammonia factory in Hammerfest, including CO2 capture and storage.
The purpose was to explore tie-in of the Alke and Goliat gas resources to Barents Blue while also contributing to a more comprehensive solution for the region overall.
The partnership has worked actively to reach a concept decision, but the overall situation has led to the decision to seek other solutions," Vår Energi said, without explaining what it meant by the "overall situation."
Vår Energi EVP Project Development & SCM, Atle Reinseth says: "We have great faith in the Barents Sea as a petroleum province. However, after thorough assessment of the project and our overall portfolio, we have concluded that it is no longer appropriate to proceed with the Barents Blue concept. 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 project. We would like to thank Equinor and Horisont Energi for the collaboration and wish the operator all the best in further maturing Barents Blue."
Vår Energi said it remained "steadfast" in its ambitions for the Barents Sea, with continued exploration, further development of the Goliat field and efforts to establish an optimal solution for gas exports.
Vår Energi EVP Exploration & Production, Rune Oldervoll explains:"Our goal is to establish an export solution for gas in the Barents Sea with the capacity to both utilise proven resources, as well as contribute to a larger area solution for further development and value creation in the region. Cooperation between the players in the region and the authorities is the key to this. Establishing sufficient export capacity can give new momentum to our northernmost petroleum province, increase value creation on land and strengthen the energy supply to Europe in the long term. Vår Energi will continue to investigate other development solutions based on previous work in cooperation with relevant parties.2
New partner
Horisont Energi on Wednesday announced a cooperation deal with the Spanish ammonia producer, for the realization of the Barents Blue project, dubbed by Horisont Energy as "Europe’s largest clean ammonia production plant: the Barents Blue project located in Finnmark, in the Northern Norway."
"Fertiberia is one of the main crop nutrition and environmental solutions providers in the European Union and one of the leading companies in Spain and Portugal. Fertiberia is the first major company in the sector to commit to being carbon neutral in the next decade and it strengthens its position in the development of products with a high added value. The company, present in several sectors, has been a permanent reference for Spanish agriculture, one of the most advanced in the world," Horisont Energi said of its new partners.
“We are proud to announce the cooperation agreement with Fertiberia providing significant experience and competence in developing green ammonia projects on industrial scale. Fertiberia and Horisont Energi share the ambition of accelerating the transition to carbon neutrality through pioneering projects. Equinor and Vår Energi have been instrumental in maturing the project in the development phase ending 31 January. We look forward to work with Fertiberia to realize the project and hence contribute to the decarbonization of European industry and transportation,” says Bjørgulf Haukelidsæter Eidesen, CEO of Horisont Energi.
Horisont Energi and Fertiberia have entered into a cooperation agreement for the development of the Barents Blue project aiming at a full partnership agreement from April 1, 2023.
As Equinor and Vår Energi discontinue their participating interests in the project, Fertiberia and Horisont Energi will hold 50% and 50% respectively after the partnership agreement.
“Our integration in this project is highly synergetic: we bring our experience as a European leader in sustainable crop nutrition to Barents Blue, with more than five decades of cumulated knowhow in the design, maintenance and operation of ammonia plants and with valuable expertise in the management of ammonia supply chains. Fertiberia was the first large company in the crop nutrition sector to manufacture CO2-free ammonia and crop nutrition solutions on an industrial scale in Europe. Being part of the Barents Blue project is a new opportunity for Fertiberia to accelerate our transformation and growth process in the production of clean ammonia, extend its uses to new areas such as transport and energy and become the first company in our sector to achieve carbon neutrality by 2035,” according to Javier Goñi, CEO of Grupo Fertiberia.
Accordig to Horisont Energi, once the first train of the project is operational, Barents Blue is planned to produce 1 million tonnes of clean ammonia and it will be the most energy efficient blue ammonia plant in the world with best-in-class carbon footprint and well aligned with the EU taxonomy.
"The Barents Blue project is supported by a grant of NOK 482 million under the EU IPCEI hydrogen program, which is not affected by the changes in the partner consortium. The IPCEI award confirms the big potential and innovative nature of the Barents Blue project," Horisont Energi said.
"Equinor remains positive to explore gas supply solutions to the Barents Blue project from Melkøya following the changes in the partner consortium. Horisont Energi will invite new partners into the Polaris CO2 storage licence, including a qualified operator. A new licence group will bring the project forward to a submission of plan for development. The changes in the licence group will be coordinated with relevant authorities," the company said.