Collaboration Agreement with GeoNetZero CDT
14 May 2021
Collaboration Agreement with GeoNetZero CDT on
Southern North Sea carbon capture and storage research
IOG plc ("IOG" or "the Company"), (AIM: IOG.L), the UK gas company targeting growth and high returns via an infrastructure-led hub strategy, is pleased to announce that it has signed a collaboration agreement with GeoNetZero CDT, Heriot-Watt University's Centre for Doctoral Training, a leader in applying geoscience to the challenges of progress towards a Net Zero economy. Under this agreement, IOG will support research into carbon capture and storage (CCS) and other renewable opportunities across quads 48, 49, 52 and 53, the location of its asset portfolio and broader Bacton catchment area in the UK Southern North Sea (SNS).
As an environmentally low-impact domestic gas developer, IOG supports the UK government's Net Zero target and the revised OGA Strategy's promotion of CCS to help decarbonise the North Sea and progress the energy transition. The Company also believes that the infrastructure, knowledge and skills generated by over 50 years of the SNS gas industry can play a constructive role in this transition. Extending the economic life of the SNS basin in a sustainable way is likely to involve long-term integration of the established gas industry with wind, hydrogen and CCS solutions. In particular, a successful blue hydrogen-CCS cluster in the Bacton area will require consistent gas supply - IOG's core business - as well as steam reformation facilities and secure offshore carbon storage sites, all in reasonable proximity.
This important latter storage element is the focus of this research, filling the gap in the geological analysis of the factors that maintain seal integrity at subsurface sites. Drawing on an extensive gas industry archive of seismic, well and core data, the key focus will be on proving which fields and aquifers across the Bacton catchment area are the most suitable carbon sinks, particularly where existing infrastructure could provide operational synergies.
Andrew Hockey, CEO of IOG, commented:
"We are very pleased to support GeoNetZero CDT's valuable research into carbon storage across our operating area. This collaboration demonstrates our support for the UK's Net Zero commitment, the new OGA Strategy and the recently announced North Sea Transition Deal.
IOG is committed to Bacton and its catchment area, where we have established a long-term strategic position to underpin our growth into a safe and sustainable UK gas producer. The area benefits from substantial remaining gas resources, extensive transportation and processing infrastructure and proximity to major markets.
In that context, rigorous technical analysis of nearby CCS potential is a key element in validating the investment thesis for blue hydrogen. This will inform the roadmap towards a decarbonised energy hub at Bacton that could bring new economic opportunities and extend the life of existing infrastructure."
Professor John Underhill, Head of GeoNetZero CDT, commented:
"I am delighted that IOG has elected to support research that will identify, examine and test carbon storage sites and other low-carbon renewable options in the Southern North Sea.
This support shows that industry recognises the relevance and impact of our research at the GeoNetZero CDT and Heriot-Watt University to decarbonise the North Sea, deliver the UK's transition to Net Zero and maintain sustainable energy supplies."
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.
|IOG plcAndrew Hockey (CEO)Rupert Newall (CFO)James Chance (Head of Corporate Finance & IR)||+44 (0) 20 7036 1400|
|finnCap LtdChristopher RaggettSimon Hicks||+44 (0) 20 7220 0500|
|Peel Hunt LLPRichard CrichtonDavid McKeown||+44 (0) 20 7418 8900|
|Vigo ConsultingPatrick d'AnconaChris McMahonSimon Woods||+44 (0) 20 7390 0230|
|Heriot-Watt University / GeoNetZero CDTProf. John Underhill||J.R.Underhill@hw.ac.uk|
IOG owns and operates a 50% stake in substantial low risk, high value gas reserves in the UK Southern North Sea. IOG's 50% Joint Venture partner is CalEnergy Resources (UK) Limited (CER). The Company's Core Project targets a gross 2P peak production rate of 140 MMcfe/d (c. 24,000 Boe/d) from gross 2P gas reserves of 302 Bcfe¹ and management estimated 2C gas Contingent Resources of 132 Bcfe, via an efficient hub strategy based on co-owned infrastructure. In addition to its 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C contingent resources at Goddard, it has management estimated gross 2C contingent resources of 23 Bcfe at Abbeydale and unrisked mid-case prospective resources of 66 Bcfe at Thornbridge, 31 Bcfe at Southsea, 31 Bcfe at Kelham, 27 Bcfe and 16 Bcfe in the two Goddard flank structures, and 21 Bcfe at Harvey. In December 2020 IOG also accepted a 50% operated stake in Licence P2589, containing the Panther and Grafton gas discoveries with management estimated gross mid-case contingent resources of 46 Bcfe and 35 Bcfe respectively. In addition IOG continues to pursue value accretive acquisitions to help generate significant shareholder returns.
1ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression
About GeoNetZero CDT:
GeoNetZero CDT is an academic-industry partnership comprising 12 universities and 8 companies that delivers doctoral training in geoscience facing the low carbon energy transition and the challenge to meet net zero emission targets. Its mission is to provide the skills and training needed to secure a sustainable low-carbon net zero future. The programme entails PhD research alongside an accredited 20-week bespoke training programme of modules delivered by experts. Established in 2014 after winning a £3 million competitive funding award from the Natural Environment Research Council (NERC), it has become recognised as a world leader in research and training. Since its inception, the CDT programme has been run by Professor John Underhill, who is based in the Institute of GeoEnergy Engineering (IGE) at Heriot-Watt University. An additional £17 million of funding has been secured from the UK government's National Productivity Investment Fund (NPIF), industry and UK Research & Innovation (UKRI), enabling over 150 PhD students to be enrolled, over 60 of whom have graduated and gone on into careers in industry and academia. GeoNetZero CDT was the only entity named under Postgraduate Training in the UK Government's North Sea Transition Deal in March 2021. Further information can be found here: https://geo-net-zero.hw.ac.uk/
Carbon capture and storage (CCS): the process of capturing carbon dioxide as an industrial or power generation by-product and sequestering it (e.g. in geological formations, often depleted gas reservoirs) to avoid release into the atmosphere.
Blue hydrogen: hydrogen produced from hydrocarbons, where the carbon dioxide is subject to CCS.
Steam reformation: core part of the process of producing hydrogen from methane, whereby methane molecules are split by the presence of high-temperature steam and a catalyst at certain pressures into hydrogen and carbon monoxide (CH₄ + H₂O + heat = 3H₂ + CO). The latter is then reacted with water molecules to become carbon dioxide, which can be subject to CCS as above, while also forming more hydrogen in the process (CO + H₂O = CO₂ + H₂).
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