Invests close to a billion kroner in pioneering carbon capture facility
Aker has decided to build what is likely to become the world's firstand largest CO2 capture facility of its kind. The planned budgetframework for the new CO2 capture plant is NOK 875 million; thefacility will be in operation as early as 2009, removing carbondioxide from exhaust emissions.
In recent years, Aker has worked intensively on developing new CO2capture technology. The primary purpose of the new facility is notprimarily further technology development; the objective is thedevelopment of construction methods and effective execution modelsthat make carbon sequestration so inexpensive that it becomes cheaperto clean emissions than to pollute.
"We have come a long way. To advance further, we must prove that weare able to package technology in commercially attractive solutions.Through our company Aker Clean Carbon, we are helping to move carboncapture from a research and development phase into commercializationand sales," says Leif-Arne Langøy, Aker ASA Chairman and CEO.
Industrial facilities and power generation plants that obtain energyby burning fossil fuels such as oil, natural gas, or coal releasehuge volumes of carbon dioxide. On a global basis, the 4,000 largestplants in operation today are estimated to generate some 40 percentof CO2 releases to the atmosphere. In addition and on average, a newcoal-fired power plant is completed each week in China.
"These plants worldwide constitute our future market. In just a fewdecades, building carbon capture facilities can become an industrysimilar to the building of oil platforms today. Our goal is to putAker Clean Carbon at the forefront as this environmental industrymatures," says Mr. Langøy.
Leif-Arne Langøy continues: "Aker finds it interesting to investsignificant funds in such a project because both the market andpotential for future value creation are great. In short, we seeopportunities to make money by helping to solve the current climatecrisis. Aker has the capacity and a willingness to take a long-termperspective in this matter."
Aker Clean CarbonAker Clean Carbon was established in 2007 as a wholly owned Akersubsidiary. For nearly a year, Aker Kværner, with funding provided byAker Clean Carbon, has developed detailed plans for building of itsfirst carbon capture facility.
The technology that underpins Aker's targeting of CO2 capture hasbeen developed by Aker Kværner over several years. Aker Kværnerrecently decided to organize its carbon catching activities in aseparate company. An agreement has been entered into to merge thiscompany with Aker Clean Carbon.
Accordingly, Aker Clean Carbon will be a focused, closely targetedtechnology and industrial environment that will serve as a commonresource for Aker and Aker Kværner's continued efforts in this area.Aker owns 70 percent of Aker Clean Carbon; Aker Kværner owns theremaining 30 percent.
The ownership ratio has been determined following valuations andnegotiations that have also recognized the value of Aker Kværner'sexclusive rights to participate in building future carbon capturefacilities in co-operation with Aker Clean Carbon.
First carbon capture plantThe carbon capture facility that Aker Clean Carbon will now beginbuilding will be completed in 2009. The plant will have a capacity toremove 100,000 metric tons of CO2 annually from exhaust gasses.Facility investments are estimated at about NOK 725 million.Operating costs are estimated at NOK 150 million over a three-yearperiod.
Aker Clean Carbon is seeking to build its first facility near thenatural-gas-fired power plant and gas processing facilities at Kårstøin the southwestern Norwegian county of Rogaland. By connecting thecarbon-capture plant to both emission sources, continuous CO2 removalcan take place, even if the gas-fired power plant is shut down forperiods.
"We will initiate dialogue with relevant public authorities andKårstø owners to discuss connection to their plants. Aker CleanCarbon will be responsible for the construction and operation of thecarbon capture plant. To the extent that such a facility is entitledto public funding, we will, of course, apply for it," says MartinusBrandal, Aker Kværner President and CEO and the incoming BoardChairman of Aker Clean Carbon.
In its first years in operation, until a public system fortransportation and storage of CO2 is in place, carbon dioxide fromthe CO2 capture facility will be released to the atmosphere.
Markets and opportunitiesIn the next few years, a number of CO2 capture facilities areexpected to be built in Europe. Aker Clean Carbon intends toparticipate in the construction of several of them. Severalopportunities have been identified, and it is likely that Aker CleanCarbon's carbon capture facility will be installed at a coal-firedpower plant.
Aker Clean Carbon has confirmed to Gassnova, the Norwegian stateowned company to promote environmentally friendly gas industrytechnology, that Aker Clean Carbon would like to bid for the frontend engineering and design (FEED) contract and, eventually, theconstruction of a full-scale CO2 capture facility at Kårstø.According to current plans, a FEED contract will be awarded in May2008, and an overall contract for building the facility will beawarded in 2009.
"Work on our own carbon capture facility will not get in the way ofthe plans for an additional full-scale facility. The latter will becompleted several years later," Brandal emphasizes.
Parallel to the construction of the first carbon capture plant, AkerClean Carbon will work closely with the SINTEF research center andthe Norwegian Institute of Technology (NTNU) in Trondheim concerningtheir efforts to develop new and improved aqueous amine solutions.Aker Clean Carbon is participating actively in the development work,and will also contribute funding to this development project, whichhas a total budget framework of about NOK 250 million over aeight-year period.
Various aqueous amine solutions function as an absorbent that bindsCO2 for removal from exhaust gasses. Such amine scrubbing will beused in Aker Clean Carbon's first carbon capture facility. Moreeffective amine scrubbing solutions can be a factor that helps cutinvestment and operating costs for CO2 capture facilities installedat industrial sites and electric power generation plants evenfurther.
For further information, please contactGeir Arne Drangeid, Group EVP, Aker ASA, tel: +47 24 13 00 65
Aker Clean Carbon's plans will be presented at Felix ConferenceCenter at Oslo's Aker Brygge on Thursday, 24 January at 11:00. Allare welcome. No advance registration is required.
Further information about Aker Clean Carbon is available at:www.akercleancarbon.com
Further information about the research project into more effectiveamine solutions is available here: http://www.sintef.no/content/page1____17173.aspx