Euroil: ExxonMobil scraps plans for UK CO2 pipeline

ExxonMobil has abandoned plans to lay a pipeline to transport CO2 from its Fawley oil refinery near Southampton to a storage site under the English Channel, citing a “continued lack of government policy certainty,” the BBC reported on October 3.

The decision raises doubts about the future of the Solent Cluster, an ExxonMobil-led initiative to capture and store as much as 3mn tonnes per year (tpy) of CO2 from the Fawley plant and other industrial facilities in the Southampton area, as well as produce blue hydrogen. The initiative already suffered a major setback last year when it missed out last year on the opportunity to receive state funding as part of the first phase of the UK government’s cluster sequencing process.

Earlier this year ExxonMobil said it hoped to get the project included in the second phase of the process. But without a pipeline to deliver the CO2 to storage, it may no longer be feasible.

The pipeline’s cancellation comes after campaigning by residents of the Isle of Wight against its construction, over concerns about its impact on the local environment and the tourist industry. 

‘“Our major investment decisions are informed by several factors including the policy, fiscal and market environment,” an ExxonMobil spokesperson told the BBC. “Over the past three years, we have made sustained efforts with the UK government to secure this certainty and enable the large-scale investment required and will maintain collaboration to address the necessary factors.”

‘’We are committed to reducing emissions from our operated assets and continue to evaluate a range of emission reductions solutions that can deliver meaningful CO2 emissions reductions.’’

A representative of the UK’s Department for Energy Security & Net Zero added it wanted to reverse a “legacy of indecision” on carbon capture utilisation and storage (CCUS). This month the new Labour government committed GBP21.7bn ($28.4bn) in funding for two carbon capture and storage (CCS) projects at the UK’s northern industrial hubs of Teesside and Merseyside. Due to start operations in 2028, these projects are set to capture a combined 8.5mn tpy of CO2 from industry.

ExxonMobil did not say how the pipeline’s cancellation would affect the Solent Cluster initiative. Generally speaking, pipelines are the better option for CO2 transport when the volumes are large and there is a smaller distance between the source of the emissions and the storage site, as is the case with Solvent Cluster.  But ExxonMobil and the initiative’s other partners could opt for CO2 transport by ship instead.

Shipping CO2 from the Solent cluster to storage sites elsewhere was in fact ExxonMobil’s original plan. But it later deemed this option too costly and technically challenging. Several years ago it carried out a large geological study off the coast of south England and identified the site in the English Channel.

The Solent Cluster is currently only at the feasibility stage, and ExxonMobil is yet to provide any guidance on when it expects to take a final investment decision (FID) on either the CCS project for the large-scale production of blue hydrogen. It is also still awaiting a CO2 storage licence.

In any case, a lot will depend on whether the initiative is included in Phase 2 of the carbon sequencing process. CCS in the UK is still at a nascent stage of development, and the first projects are expected to need significant state support to be feasible. The CCSA estimated earlier this year that the CCUS sector would require an annual revenue support envelope from 2028 of GBP2-3bn.

As the industry expands and projects begin to start at near to full capacity, and once the carbon price becomes high enough, experts expect CCUS to eventually become self-sustaining. The problem is that there is so much industry to decarbonise, and so for the time being the government is prioritising CCUS projects at the country’s largest industrial hubs, while smaller ones like in Southampton are considered as less of a priority.

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