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The Independent: Shell and Statoil seek partner for new ‘clean energy’ project

By Tim Webb

Published: 28 May 2006

Shell and Norwegian oil company Statoil are seeking a partner for their revolutionary $1.5bn (£800m) project to take millions of tons of carbon dioxide (CO2) from a new power station and pump it under the sea.

The two companies, which announced plans for the carbon sequestration project in March, want a third company to build and operate the power station.

They are expected to approach Norwegian energy giant Norsk Hydro, Danish firm Elsam and US chemicals group DuPont, among others, about joining the venture. Informal discussions with some companies have already taken place.

Under the proposals, around two million tons of CO2 would be pumped every year from a new 860-megawatt power station, which would provide power to almost one million people.

The CO2 would be pushed out to sea and into two old oil and gas fields in the Norwegian section of the North Sea operated by Shell and Statoil.

“Sequestrating” the CO2 produced from power stations underground, rather than allowing it to be released into the atmosphere, cuts down on global warming.

Scottish and Southern Energy (SSE) and BP have plans for their own generation and sequestration project in Scotland which would be the world’s first.

Scientists from Shell and Stat- oil are working out the feasibility of the project and a decision whether to go ahead will be made within the next two years.

But the chief executive and president of Statoil, Helge Lund, said that the project is not possible without financial support from the Norwegian government. He added: “The economics are challenging. We have been very clear that we are not able to go ahead unless there is some sort of government involvement.”

Pumping CO2 into oil and gas fields which are almost empty also helps companies extract the remaining reserves.

SSE, which reports its annual results later this week, is also pushing for government assistance for its sequestration project with Shell.

Chief executive Ian Marchant said: “Carbon sequestration is at the stage where it needs demonstration projects.”

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