MILAN/LONDON (Reuters) -The British government and Italian energy group Eni have reached an agreement for the launch of the Liverpool Bay carbon capture (CCS) project, they said on Thursday, opening the way to the construction phase for the initiative.
The government said last year it would provide funding of up to 21.7 billion pounds ($28.76 billion) over 25 years to develop CCS projects to curb emissions from industry and create new jobs in northern England.
The Liverpool Bay project, which the government says will unlock 2 billion pounds in supply chain contracts and create 2,000 jobs, is included in this initiative and is expected to help cut emissions in a major industrial area of the UK.
The project will allow the transport of carbon dioxide (CO2) from industrial plants across the northwest of England and north Wales through new and re-purposed infrastructure to depleted Eni-operated gas fields in Liverpool Bay.
It also involves the construction of 35 km (22 miles) of new pipelines to connect industrial plants to the Liverpool Bay CCS network, Eni said in a statement.
Neither Eni nor the government gave any financial details of the agreement.
The Liverpool Bay project will be the backbone for the so-called HyNet CCS Cluster, Eni said, adding the Italian group would act as the CO2 transport and storage system operator.
The initiative is part of Britain’s efforts to curb emissions from energy-intensive industries and reach net zero emissions by 2050.
“The UK has the resources to become a global centre of excellence for carbon storage, with up to 78GT (gigatonne) storage potential in the UK continental shelf, enough to store centuries’ worth of CO2,” energy minister Ed Miliband said in the government statement.
The International Energy Agency says CCS can play a vital role in achieving global climate goals while critics say it risks prolonging the use of fossil fuels and question its commercial viability.
Eni plans to create a separate division dedicated to CCS and is currently in talks with a handful of suitors interested in taking a minority stake in this business, sources told Reuters.
It is developing several CCS projects including one in Italy where it is working with gas grid operator Snam.
($1 = 0.7504 pounds)
(Reporting by Francesca Landini in Milan; additional reporting by Susanna Twidale and Muvija M in London; Editing by Susan Fenton)
