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BP Forms Clean-Energy Venture

THE WALL STREET JOURNAL: BP Forms Clean-Energy Venture

Posted Saturday 2 July 2005

Associated Press

LONDON — Oil group BP PLC said it has formed a joint venture with ConocoPhillips, Shell Transport & Trading Co. and Scottish & Southern Energy PLC to begin work on a project to generate “carbon-free” electricity from hydrogen.

BP said the project, which would make use of a power station in northern Scotland and export the carbon dioxide to a North Sea oil reservoir, would require total investment of some $600 million, or about €497 million.

Initial engineering-feasibility studies have been completed, BP said, and the partners are now working to confirm the project’s economic viability. BP said it expects that review to be completed in the second half of 2006, allowing a final investment decision to be made next year. If the project is approved, the group plans to start operation in 2009.

In its March 2005 budget, the British government said it is examining the potential for economic incentives to support the development of carbon capture and storage technologies and applications.

The BP-led project would convert natural gas to hydrogen and carbon dioxide gases, then use the hydrogen gas as fuel for a 350 megawatt power station near Peterhead, northern Scotland, and export the carbon dioxide to a North Sea oil reservoir for increased oil recovery and ultimate storage.

When fully operational, the project would be expected to capture and store around 1.3 million tons of carbon dioxide each year and provide “carbon-free” electricity to the equivalent of a quarter of a million U.K. homes. BP said the project would reduce the amount of carbon dioxide emitted to the atmosphere by the power generation by over 90%.

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