Acquisition of Carbon Storage Licenses in UK North SeaDevelopment of cost-competitive CO2 transport/storage services adjacent to industrial zone

Sumitomo Corporation, through its wholly-owned UK subsidiary Summit Energy Evolution Limited ("SEEL"), has acquired a 10% share in each of two carbon storage (“CS”) licenses (CS017 and CS018) encompassing the Amethyst and West Sole gas fields in the UK Southern North Sea. This is the first acquisition of CS licenses in the UK by a Japanese company through a wholly-owned subsidiary.

UK government’s decarbonization ambition through carbon storage

Oil and natural gas development areas in the UK North Sea are thought to have enormous carbon dioxide storage capacity potential, and the UK government, which hopes to achieve CO2 net-zero by 2050, has positioned the widespread use of CCS* as a key strategy for decarbonization. The conversion of large abandoned oil and gas fields for carbon storage is expected to be particularly advantageous in terms of cost reduction and commercialization schedules, and integrated energy companies such as BP and Shell have actively acquired licenses in the UK last year. In 2022 the UK government announced the first CS License application round and awarded 21 licenses including CS017 and CS018. SEEL has acquired a 10% working interest, subject to regulatory approval, in the licenses from Carbon Catalyst Limited.
After completion the license equity position will be:

Perenco UK Ltd 80% (Operator)
Carbon Catalyst Ltd 10%
Summit Energy Evolution Ltd 10%

Project overview

This project is an initiative to contribute to the UK’s decarbonization by storing CO2 in the Amethyst and West Sole gas fields in the UK Southern North Sea. The UK Southern North Sea is regarded as a highly competitive area and a significant number of licenses containing matured gas fields within this basin were awarded. In addition, CS017 and CS018 license area is close to Humberside, one of the largest industrial zones in the UK, so the transport from CO2 emission sources to storage site is short, making it possible to provide highly cost-competitive CO2 transport and storage services. The potential for the import of CO2 from EU/EEA countries may be assessed in the future.

After completing a work program that will include an assessment on storage capacity and leakage risks, facility design and development of the long term monitoring plan, the project will seek a commercialization permit from the UK government, with a final investment decision expected in 2029. Commencement of CO2 injection is initially expected to be 1 million tonnes per year in 2031, with expansion of CO2 injection capacity to six million tonnes per year thereafter. The project will contribute to the UK government's target of 20–30 million tonnes of storage per year as of 2030.

Sumitomo Corporation's carbon storage business strategy

Sumitomo Corporation has been developing its CO2 capture, transport/storage and utilization businesses by leveraging the experience accumulated since the 1970s in the upstream oil and gas business, as well as its knowledge of various business domains and supply chains. Starting with this project, the company will further build up its experience in CO2 transport and storage in the UK, using the knowledge gained there to expand its business to the Americas and the Asia-Pacific region.

1. CCS：abbreviation for Carbon dioxide Capture and Storage, i.e., the capture and storage of CO2 emitted from industrial activities
2. CCUS：abbreviation for Carbon dioxide Capture, Utilization and Storage, i.e., the capture, storage and utilization of CO2 emitted from industrial activities

Profile of company

Company name	Summit Energy Evolution Limited (SEEL)
Head office location	London, United Kingdom
Representative	Paul Lafferty
Year established	2021
Description of business	Low-carbon energy projects (CCUS, low-carbon hydrogen production, etc.)

Profile of interests

Interests concerned	CS017 (area including Amethyst gas field) CS018 (area including West Sole gas field)
Partners	Perenco UK Limited: 80% Carbon Catalyst Limited: 10% SEEL: 10%
Period	5.5 years
Decision on development	2029
Injection commencement	2031
Injection capacity	Initial: 1 million tonnes/year After expansion: 6 million tonnes/year

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