Neptune eyes UK blue hydrogen plus CCS scheme

Privately owned producer Neptune Energy confirmed May 12 it had applied for a carbon capture and storage (CCS) licence from the upstream regulator Oil & Gas Authority (OGA).

The government's Department for Business, Energy and Industrial Strategy published May 7 a value chain for CCS, which the industry had awaited before considering investment in an otherwise uncertain regulatory environment.

The licence application covers southern North Sea blocks which are near the company’s producing Cygnus gas field, which delivers gas to the Bacton terminal. The OGA had marked out Bacton as a potential blue hydrogen hub but according to documents submitted by Neptune, this plan, called DelpHYnus, involves collecting CO₂ from the Humber region and delivering blue hydrogen, produced from gas from the grid, at the Theddlethorpe beach terminal, to end-users there. The offshore part of the project would be powered by renewable energy.

Neptune said in documents submitted to the OGA that it has engaged with CO₂ emitters and hydrogen offtakers in the South Humber industrial area and “these discussions have provided confidence that there is demand for both the transport and storage service and the supply of blue hydrogen. Neptune is also in discussions with industrial gas manufacturing companies to partner with them for the blue hydrogen plant. These discussions have been positive and are progressing at pace. The next stage is to develop an end-to-end value chain consortium combining CO₂ capture, transport and storage together with blue hydrogen production and offtake."

The OGA could take up to six months to decide on awarding the licence but does not disclose the identities of applicants. Neptune also declined to comment further. In March, another company applied for a licence in the same segment of the North Sea.

In the north of the UK, Norwegian Equinor and UK utility SSE have announced plans to develop a combined-cycle gas turbine with carbon capture built in; they are looking at the Acorn CCS project based at St Fergus, a gas terminal in Scotland.