May 15, 2013 / 3:03 PM / in 5 years

Statoil to call tender for carbon capture technology

* Statoil plans to award contract in 2014

* Five companies took part in pre-qualification

* Parliament expected to decide in 2016

OSLO, May 15 (Reuters) - Norwegian oil and gas firm Statoil will call a tender in the coming weeks to acquire technology for a full-scale carbon capture plant at a power plant at Mongstad in west Norway, a company official said.

The International Energy Agency, which advises industrialised countries on energy policy, says deployment of carbon capture and storage (CCS) technology is critical to reducing carbon emissions, but so far there is no full-scale commercial plant in operation in the world.

“We plan to call a tender to supply carbon capture technology in a few weeks, and our plan is to award the contract before the summer of 2014,” Kai Lima, Statoil’s vice president for CO2 management, told Reuters.

Lima declined to give cost estimates for the plant, saying it will be updated depending on technology chosen and presented to parliament to approve the final investment decision in 2016.

Five companies - Mitsubishi Heavy Industries LTD, Alstom Carbon Capture GmbH, Siemens AG, Aker Clean Carbon, and Huaneng-CERI Powerspan Joint Venture - took part in the pre-qualification programme to show they have technologies that can be scaled up.

The goal is to capture up to 1.5 million tonnes of carbon dioxide per year from flue gases coming out of 280-megawatt combined heat and power plant, which supplies power and heat to nearby Mongstad refinery and Norway’s biggest gas field, Troll.

Statoil will implement the project, while it is expected to be funded by the government through its fully-owned enterprise Gassnova, Lima said.

Gassnova has already funded most of the costs of a 5.8 billion crowns ($999.3 million) demonstration project designed to capture up to 100,000 tonnes per year of CO2, with Statoil, Royal Dutch Shell and South Africa’s Sasol as its partners.

There were plans to store carbon dioxide in geological formations on the seabed of the Norwegian continental shelf, but the site had not been decided yet, Lima added.

Statoil has already been pumping carbon dioxide stripped from natural gas extracted at Sleipner and Snoehvit fields back underground, thus avoiding paying tax on emissions.

Canadian company Saskatchewan Power Corp. plans a test next year to prove full-scale CCS can work at a coal power plant.

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