Norway races ahead of UK with emissions-curbing North Sea electrification project

Norway's Equinor together with Shell, Total and the US' ConocoPhillips have agreed a plan to extend provision of low-carbon electricity to the giant Troll field, as the country increases its lead over the UK industry both in production and the decarbonization of the industry.

In a statement, state-controlled Equinor said the partners would spend nearly $1 billion on the project to provide low-carbon electricity, derived from the renewables-based national grid, to the Troll B and C platforms, following a similar earlier project at Troll A.

The project will reduce CO2 emissions by half a million mt/year, Equinor said, representing a 3% cut in the Norwegian oil and gas industry's upstream emissions and a 1% cut in the country's total emissions, and supporting a Norwegian goal for half its hydrocarbon output to come from facilities that source their power from the grid by mid-decade.

The partners, which also include state holding company Petoro, "have decided in favor of Troll West electrification, and today submit the plan for development and operation. The decision includes partial electrification of the Troll B platform and full electrification of Troll C," Equinor said.

Norway, with plentiful hydropower from the country's fjords, has moved well ahead of the UK in curbing emissions produced in the course of oil and gas production from activities such as drilling.

This has partly been enabled by big hydrocarbon discoveries, which have led to investment in new facilities and supported production at fields such as Troll. Output from the field is a constituent in the Platts Dated Brent oil price benchmark as well as a major source of gas for Europe. The giant Johan Sverdrup field, which came on stream in 2019, derives all its power from shore and also relays electricity to nearby platforms.

Equinor noted a string of investments had been enabled by a temporary tax cut enabling fast reimbursement of capital costs, approved last June; on April 23 it also approved a new investment at the Snohvit gas field in the Barents Sea, with a decision to develop the Askeladd Vest satellite field. The tax changes "adopted by parliament as a result of COVID-19 have enabled us to implement several projects planned prior to the pandemic," Equinor's executive vice president for technology, projects and drilling, Arne Sigve Nylund, said.

UK catch-up

By contrast, the UK industry has taken a big hit from last year's price crash, with oil production falling due to a lack of drilling and little sign of investment in major projects. Oil output in January amounted to 1 million b/d, with a round of maintenance work expected to weigh more heavily over the summer.

Solving the problem of providing low-carbon electricity to aging platforms is now seen as a precondition for any major new investment in the West of Shetland area, where several large oil fields await development.

In March, the government announced a plan of joint funding for projects to support the North Sea industry in the energy transition, including GBP3 billion ($4.2 billion) for electrification projects intended to reduce the industry's emissions; upstream oil and gas production is thought to account for 10% of UK power generation emissions.

Several plans for bringing low-carbon electricity to UK oil and gas platforms are under consideration; all the companies involved in the latest Norwegian decision are also active in UK waters. But progress will also require significant changes to UK regulation of the electricity industry, according to industry group Oil & Gas UK.

"I'm pretty convinced all the operators looking at new field developments West of Shetlands recognize they're going to have to be — if not immediately already ready — then designed to flip over to electricity import to the platforms," OGUK's sustainability director, Mike Tholen, told Platts in February. "The issue is how you actually get it to happen."