Equinor, Var Energi drop out of Barents Blue ammonia project in Norway
Norwegian energy firms Equinor and Var Energi have withdrawn from the Barents Blue ammonia project in Norway following the expiry of a cooperation agreement with operator Horisont Energi at the end of January, the companies reported on February 1.
Horisont has reached a new cooperation deal with Spanish ammonia producer Fertiberia, a partner which it said provided "significant experience" at developing ammonia projects on an industrial scale. Each firm will have a 50% stake in the project. Horisont noted that Equinor and Var Energi had been "instrumental" in maturing the scheme so far.
Situated in Finnmark, in north Norway, Barents Blue's first train is due to produce 1mn metric tons/year of clean ammonia from natural gas, making it the biggest project of its kind in Europe. The CO2 emitted during production will be captured and stored under the seabed.
Equinor said it had also decided not to take part in the Polaris project, where CO2 from Barents Blue was due to be stored. But it "remains positive to explore gas supply solutions" from its Hammerfest LNG complex to Barents Blue. Var Energi said it had looked at various options for developing its gas resources at the Alke and Goliat fields west of Hammerfest, but was now seeking alternative solutions to Barents Blue.
"We have great faith in the Barents Sea as a petroleum province," the company said. "However, after thorough assessment of the project and our overall portfolio, we have concluded that it is no longer appropriate to proceed with the Barents Blue concept."
Developing gas at Goliat, Alke and Lupa "will require an export solution with greater capacity than what we deem realistic within the scope of the project," Var Energi said.
Horizont said that the 482mn kroner ($48.3mn) grant that had been provided to Barents Blue under the EU IPCEI hydrogen programme had not been affected by the changes in the partnership consortium. The company will invite partners into the Polaris project, including a qualified operator to replace Equinor.
"A new licence group will bring the project forward to a submission of plan for development," Horisont said.