Hoegh LNG, Aker BP Team Up for CCS Solutions
09.12.2023 By Tank Terminals - NEWS

September 12, 2023 [Rigzone]- Hoegh LNG AS and Aker BP ASA have entered a strategic partnership to develop a comprehensive carbon transport and storage (CCS) offering for industrial carbon dioxide (CO2) emitters in Northern Europe, targeting to develop seaborne transportation and injection solutions for the greenhouse gas.


Hoegh LNG said in a news release that the agreement “combines the companies’ respective strengths, expertise, and technologies to establish a strong value chain for CCS on the Norwegian Continental Shelf”. The CCS initiatives include gathering, transporting, and securely injecting carbon dioxide for permanent storage in subsea reservoirs, Hoegh LNG said.

“Hoegh LNG welcomes the opportunity to join forces with Aker BP and deliver a large-scale, one-stop-shop CCS value chain to industrial emitters before 2030. Together we will provide market-leading solutions for decarbonizing at a low unit cost, contributing to the energy transition in Europe”, Hoegh LNG CEO Erik Nyheim said.

“We expect CCS to play a key role in the transition to a low-carbon energy future. This partnership reflects our ambition to advancing CCS solutions by combining Aker BP’s strengths in subsurface understanding and large-scale project development with Hoegh LNG’s technical expertise in the LNG sector”, Aker BP CEO Karl Johnny Hersvik said.

Hoegh LNG is aiming to further develop its concept of floating carbon dioxide storage units (FCSOs) enabling purification and aggregating carbon dioxide from multiple emitters in key export hubs. The units will allow cost-efficient solutions for smaller emitters that would otherwise not be able to develop solutions on their own, the company said.

The liquified CO2 will be transported by shuttle tankers at low pressure, resulting in larger transportation capacity and lower CO2 unit cost due to the scale. Aker BP will lead the development of offshore injection facilities and identify suitable subsea reservoirs for the storage of carbon dioxide, according to the release.

Further, Hoegh LNG and Aker BP will work together to unlock potential new business opportunities for transportation and storage solutions within the Norwegian Continental Shelf for carbon dioxide captured from industrial emitters in Northwest Europe, the release said.

Meanwhile, Hoegh LNG Holdings Ltd. and its subsidiaries reported a total income of $126.8 million and an EBITDA of $78.7 million for the second quarter, compared to $137.4 million and $91.9 million, respectively, for the previous quarter, according to an earlier news release.

The decrease in EBITDA of $13.2 million was mainly a result of its Hoegh Giant LNG tanker being idle for most of the second quarter, partially offset by Hoegh Gandria, which was acquired toward the end of the first quarter, starting a one-year LNG carrier time charter from late April, the company said.

Hoegh LNG said its fleet delivered a stable operating performance in the second quarter and that although Hoegh Giant was idle for most of the quarter it was being repositioned to start floating storage regasification unit (FSRU) operations under its long-term contract in Brazil in the third quarter. Hoegh Gannet is currently performing its commissioning work in Germany before entering regular commercial regasification operations. Cape Ann, which is employed on a long-term charter with TotalEnergies SE, has left the yard after completing modifications and class renewal and is currently being repositioned for FSRU operations in France later in the year, according to the release.

Commenting on the market, Hoegh LNG said, “Global LNG and gas markets have been calmer in the second quarter of 2023 relative to the situation seen in 2022, albeit at levels that remain elevated compared to historical averages. Natural gas storages in Europe have been building, reaching milestone levels considerably earlier than required by the EU [European Union], helped by relative muted downstream demand both in Europe and Asia. While this in itself has relaxed markets, it remains the case that Europe is now far more reliant on LNG imports than before imports of Russian pipeline gas collapsed. Future prices for natural gas and LNG indicate that global gas markets will tighten considerably towards the end of the year, reflecting the risk that next winter may turn out to be colder than the last one. Longer term market growth for LNG has gained further support as several upstream liquefaction projects are advancing, not least in the US, while Vietnam, the Philippines, and Hong Kong are commissioning their first LNG import terminals”.


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