Sumitomo to Acquire Stake in UK’s Orion Carbon Storage Project

The United Kingdom’s (UK) Carbon Catalyst Limited (CCL) has reached an agreement to farm out a 10 percent working interest in the Orion carbon storage license with Summit Energy Evolution Limited (SEEL), a wholly owned subsidiary of Japan’s Sumitomo Corporation.

The Orion project consists of two carbon storage licenses, CS017 and CS018, which cover the Perenco UK operated and decommissioned Amethyst and depleted West Sole gas fields. These fields are the most geographically proximal offshore storage sites to Humberside, the UK’s largest industrial cluster, and are directly connected by pipeline to the Perenco-operated onshore Dimlington Gas Terminal.

The agreement, subject to regulatory approval, marks SEEL’s entry into the UK carbon storage sector and is the first acquisition of carbon storage licenses in the UK by a Japanese company through a wholly-owned subsidiary, Sumitomo and CCL said in separate news releases. Upon completion of the transaction, Perenco will hold an 80 percent interest in the asset operator, with CCL and SEEL holding 10 percent interest each. The transaction value was not disclosed.

The Orion project aims to contribute to the UK’s decarbonization goals by storing carbon dioxide in the Amethyst and West Sole gas fields in the UK’s Southern North Sea. After completing a work program that will include an assessment of 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, Sumitomo noted. The start of the carbon dioxide injection will start in 2031 at 1 million metric tons per year, expanding to a capacity of six million metric tons annually over a 40-year period, contributing to the UK government’s target of storing 20 million to 30 million metric tons annually by 2030. Orion targets the permanent geological storage of approximately 126 million metric tons of carbon dioxide.

“CCL is very pleased to welcome SEEL to the Orion CCS project. SEEL not only brings extensive experience from its former activities in the UK oil and gas sector and leadership of the Bacton Energy Hub, but also leverages Sumitomo Corporation’s global energy transition activities across shipping, hydrogen production and transportation, alternative sustainable fuels and energy transition infrastructure”, CCL Executive Director Henry Morris said.

SEEL is a UK-based wholly owned subsidiary of Sumitomo Corporation which is committed to the development of strong partnerships to help deliver low carbon and net zero initiatives, including carbon capture, utilization and storage (CCUS) and hydrogen in the UK and globally.

Sumitomo has been developing its CCUS 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 the Orion project, the company said it plans to further build up its experience in carbon dioxide transport and storage in the UK, using the knowledge it gains to expand its business to the Americas and the Asia-Pacific region.

In September, the UK North Sea Transition Authority (NSTA) announced a list of companies that had accepted licenses following the UK’s first ever carbon storage licensing round. A total of 14 companies were awarded 21 licenses in depleted oil and gas reservoirs and saline aquifers which cover around 12,000 square kilometers. The locations could store up to 30 million tons of carbon dioxide per year by 2030, according to the NSTA, which added that this equates to approximately 10 percent of UK annual emissions, according to an earlier report.

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