UK shortlists BP, Equinor low-carbon gas power project for support

OSLO, March 30 (Reuters) - Britain shortlisted for state support a project by BP and Equinor to build a large-scale gas power plant with carbon capture and storage (CCS), the government's latest selection round showed on Thursday.

The British government has shortlisted a total of eight projects that it said could help reduce the country's carbon dioxide emissions and kickstart a hydrogen-based economy.

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"The decision paves the way for the project to enter into negotiations with the UK government on commercial terms, with a planned final investment decision in 2024, to be operational by 2027," Equinor said in a statement.

BP and Equinor had previously planned to make the final investment decision in 2023.

The Net Zero Teesside Power (NZT), a joint venture between BP and Equinor, aims to build a gas power plant with 860 megawatt (MW) capacity that could provide low-carbon power to around 1.3 million homes.

Most of the carbon dioxide emissions will be captured and stored under the seabed in the North Sea, making the plant a first-of-a-kind, the partners have said.

Two supplier consortia - one led by Technip Energies and another led by Aker Solutions - are vying to supply the carbon capture technology and to build the plant.

Equinor's two other projects - a gas-to-hydrogen plant with CCS at Saltend Chemicals Park near the city of Hull and a gas power plant with CCS at Keadby - were not selected.

Equinor said it hoped that both projects in the UK's Humber area may submit bids at later stages "to help to decarbonise the UK's most energy intensive industrial region".

The British government said the project list was not final and could be expanded later by adding new projects as they become more viable. (Reporting by Nerijus Adomaitis, editing by Terje Solsvik, Kirsten Donovan)