BP scraps Peterhead carbon capture project

May 24 2007

BP has scrapped its planned carbon capture project in Peterhead, Scotland, just days after announcing plans to operate it jointly with Rio Tinto in their new joint venture Hydrogen Energy Ltd.

The project was scrapped because the UK Government announced a delay to its "competition" for the first carbon capture and storage demonstration projects in the UK, which would have been eligible for government support.

Now the UK Government says it will work on the framework for the competition between now and November 2007, when the competition will be formally launched.

BP described the delay as "an extension too far". It stresed that it was still committed to carbon capture, and its projects in Australia and California. It has already spent over $25m on the Peterhead project.

The problem was that BP was already keeping its Miller Oil Field in the North Sea operating beyond the point where it would have normally been considered uneconomic, so it could be used to receive CO2 from the new clean coal plant.

""It would have been difficult to keep the project alive when there is uncertainty about funding. We have already spent a lot of money on the project," said BP.

BP does not have the only carbon capture project being developed in the UK; Centrica had also announced plans to build a coal power station in Teeside, UK, using carbon capture and storage technology.

In the statement from UK Trade Secretary Alastair Darling, he said that the government was in talks with about 6 companies on carbon capture and storage technology.

Hydrogen Energy

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