In the $1.4 billion project, Statoil will build an 860-MW gas-fired power plant and expand its methanol production facility at Tjeldbergodden near Trondheim in central Norway. CO2 will be separated from the power plant's exhaust gases and sent via pipeline to Shell's Draugen and Heidrun offshore oil fields. Shell says the CO2 could raise oil output at the Draugen field by up to 85% and extend its life by five years.
Potentially, 2.5 million metric tons of CO2 will be stored annually in the two fields. As a result, emissions from the power plant will be close to zero. The project will require substantial investment from the Norwegian government, and its various components will be phased in from 2010 to 2012.
"This is an important milestone for Shell toward our vision for greener fossil fuels with part of the carbon dioxide captured and sequestered underground," Shell Chief Executive Officer Jeroen van der Veer says.
In a related development, the world's largest pilot plant for demonstrating new technologies for capturing CO2 from power stations began operating on March 15. CO2 is being separated from emissions from the Elsam power station near Esbjerg, Denmark, and stored underground. The project received $10 million in European Union research funding.