Equinor, Var Energi depart Barents Blue H2, CCS project

Norway's state-controlled Equinor and independent Var Energi have left the planned blue ammonia Barents Blue project and its linked carbon capture and storage (CCS) development in northern Norway, and will be replaced in the former by Spanish fertiliser producer Fertiberia.

The agreement between Equinor, Var Energi and operator Horisont Energi expired on 31 January. Horisont has now entered a co-operation agreement on Barents Blue with Fertiberia, aiming at a full partnership from 1 April, resulting in a 50pc share for each company. Fertiberia plans to be net zero by 2035.

Equinor and Var Energi have also pulled out of the planned Polaris CO2 storage site, which is linked to the Barents Blue development. Polaris, in the Barents Sea offshore northern Norway, will store the carbon captured during the ammonia production process. The site's potential storage capacity of 100mn t means it could permanently store CO2 from other sources. Horisont will "invite new partners into the Polaris CO2 storage licence, including a qualified operator," it said today. It plans to submit a development plan with a new licence group.

The Norwegian ministry of petroleum and economy awarded a CO2 storage licence to Polaris in April 2022.

Var Energi is still seeking "a comprehensive gas export solution" for Barents Sea resources, it said today.

"Development of the proven [gas] 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," Var Energi said. It will continue to explore and develop in the Barents Sea, it added.

Equinor said it "remains positive to explore gas supply solutions from Hammerfest LNG to the Barents Blue project following the changes in the partnership."

Barents Blue won a grant of 482mn Norwegian kroner ($48.5mn) from the EU, under its important projects of common European interest (IPCEI) scheme. The funding is unaffected by the changes in the consortium, Horisont said.

Fertiberia said the Barents Blue project, in Finnmark, the northernmost region of Norway, will be largest clean ammonia production plant in Europe. The project will produce 1mn t/yr of blue ammonia when it comes online. The companies previously said it would start in 2026, and were unavailable to comment if this had changed with the new partners.

Analysis by Argus estimated the project would need carbon prices at a minimum of $84/t to be viable unless the developers are able to fetch a premium for their low-carbon blue ammonia over the market price for conventional grey ammonia. The price of EU ETS allowances for delivery in December 2023 averaged €82.94/t CO2e ($90.48/t CO2e) over the past month.

Equinor advances Belgium Project

Separately, Equinor said it is progressing with its carbon capture-enabled 1GW/yr hydrogen project in Belgium with utility Engie. The partners completed a feasibility study on building the plant at Engie's site near Ghent and have now signed an agreement to take the project forward and select design concepts in 2023. A final investment decision is yet to be made.

More than 20 potential hydrogen buyers expressed interest in the H2BE project last year, Equinor said.

By Georgia Gratton and Aidan Lea