June 24, 2019 [Tank News International] – Early this year the Porthos project organisation investigated the industrial interest to store CO2 in depleted offshore gas fields under the North Sea. Companies expressed more than sufficient interest in the system to continue with the preparations.
Porthos now aims to close cooperation agreements (so called Joint Development Agreements, JDA) with interested companies. With these agreements, Porthos and companies agree to jointly work towards the conclusion by mid-2020 of final contracts for the transport and storage of CO2. Companies which sign a JDA before October 1, 2019, will get a preferential right to capacity in case the demand exceeds the available capacity for the transport and storage system.
Early 2019 several companies signed an Expression of Interest with Porthos, which was legally not binding. The JDA does contain rights and obligations. The most important is that companies who sign a JDA before October 1, 2019, will get a preferential right to capacity in the capacity allocation procedure.
This means that if the demand for capacity will be larger than available capacity, companies who have signed a JDA will get access first. In return, the companies oblige themselves to prepare the design of their capture installations and apply for the necessary permits.
Porthos obliges itself to continue the technical preparation of the project and the EIA and permit procedure. Companies can sign a JDA before October 1, the option is available to all companies, including those who have not submitted an Expression of Interest yet. The preferential right will only be awarded to the companies who sign a JDA before October 1.
Porthos then targets conclusion of final contracts between companies and Porthos for transport and storage of CO2 by Summer 2020. On base of these contracts, companies can then apply for government SDE++ subsidies.
If such subsidies are not timely awarded, the contract can be annulled. As soon as the subsidies are awarded, or if companies do not need subsidies, and all other conditions have been complied with, de companies and each of the Porthos parties can take their respective investment decisions.
The Porthos Final Investment Decision (FID) is anticipated for early 2021. At that moment Porthos has already invested considerably in its preparatory works. This is one of the main reasons that Porthos in the run-up to FID wants to increase cooperation with companies who want to store CO2 via Porthos. From Expression of Interest (EoI) via Joint Development Agreement (JDA) to contracts.