EnQuest PLC is set to be among “advantaged” firms that were offered licences to inject captured carbon in depleted North Sea oil and gas fields on Thursday, analysts say.
London-listed EnQuest was among the 12 successful applicants to take part in the UK’s first North Sea carbon capture and storage licensing round, having secured a permit for projects at four sites 99 miles off the coast of Shetland, two of which it already operates on.
Centrica PLC (LSE:CNA)-backed Spirit Energy was also among those confirmed to have been offered licenses, alongside Neptune Energy, with the remaining nine yet to be announced.
“We think that those carbon capture storage projects that repurpose existing infrastructure and logistic bases will be relatively advantaged,” SP Angel analysts noted.
These will also provide “a quicker and less capital-intensive transition strategy,” the broker said.
As part of the project, EnQuest will ship captured carbon dioxide to its Sullom Voe Terminal in Shetland, where it will be piped and injected into the depleted wells offshore.
“The flexibility afforded by a shipped solution for carbon storage is expected to enable a service to be provided to isolated emitter clusters in the UK, Europe and further afield who may not otherwise be able to access storage infrastructure,” the oil company said.
Critics have argued that the untested process of storing captured carbon offshore could be expensive, risk leaks and slow the phase-out of oil and gas.
The use of well-known geological formations should mitigate this though, according to the London School of Economics, with the North Sea Transition Authority dubbing the practice as “necessary” for carbon-intensive industry.
“Feasibility studies indicate the capability to support a project that could store up to ten million tonnes of carbon per annum,” SP Angel added.
“Providing [EnQuest] the opportunity to go beyond net zero.”