Shell signs agreement to develop CCS and hydrogen project in Scotland

Oil giant Shell has signed an agreement with Pale Blue Dot Energy and Harbour Energy to develop a carbon capture storage (CCS) and hydrogen project at the St Fergus gas terminal in Aberdeenshire.

The first phase of the Acorn project would see the existing Goldeneye gas pipeline repurposed to transport carbon dioxide captured at the terminal to a storage site around 100 kilometres from the coast in the North Sea.

For the second phase, a hydrogen production facility would be built at St Fergus, where natural gas would be reformed to produce so-called blue hydrogen, with the resulting emissions being captured and stored using the CCS infrastructure.

The onshore CCS pipeline would also be extended to Grangemouth in Scotland’s central industrial belt and to Peterhead Port, where CO2 could be imported by ship from other parts of the UK and Europe.

Shell, Pale Blue Dot Energy and Harbour Energy have agreed to develop the project as equal partners through to a final investment decision, construction and operation. They are aiming to get the both the CCS infrastructure and the hydrogen plant up and running by the mid-2020s and store at least 5 million tonnes of carbon dioxide per year by the end of the decade.

Steve Phimister, upstream director for Shell UK, said: “Shell will seek to have access to an additional 25 million tonnes a year of carbon capture and storage capacity by 2035. We have large scale projects being developed in Australia and Norway, and a facility in Canada already capturing 1 million tonnes per year.

“But to reach net zero the world needs much more CCS capacity. The Acorn project is an exciting vision for how we could help deliver that for Scotland and the UK.”

The project is being led by Pale Blue Dot Energy – a subsidiary of Storegga, whose chief executive, Nick Cooper, said: “This agreement cements our relationship with our industry partners, Shell and Harbour Energy, and allows us to look forward with confidence to the next few years as we race to tackle climate change in a way that’s sustainable, cost efficient and deliverable.”

Meanwhile, EDF has become the latest company to join the Hydrogen Taskforce – a coalition of industry organisations operating in the sector. EDF plans to produce hydrogen at its proposed Sizewell C nuclear plant in Suffolk and use hydrogen produced at Sizewell B during its construction.

Julia Pyke, finance and economic regulation director for Sizewell C, said: “Constant low carbon electricity from nuclear is a great way of producing clean, green hydrogen. If Sizewell C gets the go-ahead, an electrolyser powered by Sizewell B could allow us to make fuel for hydrogen vehicles and plant used during construction. It could also kickstart a whole new hydrogen market in the East of England, including supporting Freeport East.

“In the longer term, Sizewell C could produce large amounts of green hydrogen and bring added flexibility to the energy system. We look forward to sharing our experiences with the Hydrogen Taskforce and contributing to the UK’s wider plans for this crucial net zero technology.”

Gareth Morrell, co-lead on the Hydrogen Taskforce Secretariat and head of insights at Madano, said: “EDF is a major player in the UK energy supply chain and Sizewell C is potentially capable of creating vast amounts of low carbon hydrogen that can support the UK’s route to net zero. EDF’s joining the taskforce will add their significant experience, diversity and expertise to this coalition’s work engaging with the UK government, which is currently devising a UK hydrogen strategy.”