Horisont exploring Polaris CO2 storage options after Orlen pulls out

Horisont Energi is exploring options for developing the Polaris CO2 storage license after Orlen Upstream Norway pulled out, Horisont said in a statement Oct. 14.

Horisont said it was in discussion with the Norwegian Ministry of Energy and new potential license partners, and is working "to secure a way forward" for the exploration license in the Barents Sea.

"Polaris has already documented its reservoir capacity and technical CO2 storage feasibility, establishing it as a technically mature project," Horisont co-CEOs Bjorgulf Haukelidsaeter Eidesen and Leiv Kallestad said in the statement.

The CO2 store was an integral part of Horisont's 1 million metric ton per year Barents Blue ammonia project under development with Fertiberia in northern Norway.

However, Horisont said on Oct. 10 it was also assessing additional CO2 storage options as part of concept selection for the project.

"Recent development for CO2 storages in the North Sea has provided new alternatives, and thus optionality, for the Barents Blue project that were not available when the project was launched," Horisont said in the statement.

"Horisont Energi will now consider the options of how to bring the Polaris project forward as a competitive alternative for the Barents Blue Project," Eidesen and Kallestad said.

Horisont is targeting a final investment decision for Barents Blue in 2026, with operations from 2029-30. The FID date has slipped from a previous target of late 2025.

Orlen did not immediately respond to a request for comment.

In December 2023, Orlen agreed to buy a 50% stake in Horisont’s Polaris CO2 storage project, becoming partner and operator of the CO2 storage license.

Storage injection capacity could reach 3-6 MMt/y, with injections set to begin in 2029, providing an outlet for 2 MMt/y of CO2 from the Barents Blue ammonia project, as well as additional volumes from Orlen and third parties.

Horisont has noted significant execution risk to developing its low-carbon ammonia and CCS projects.

Platts, part of S&P Global Commodity Insights, assessed blue ammonia costs delivered to Northwest Europe at a $56/t premium to conventional ammonia, assessed at $590/t on Oct. 11.

Alternative CO2 stores

Horisont said an alternative CO2 store in the North Sea would reduce capital requirements and reduce risk for Barents Blue.

The company is exploring the commercial potential, though acknowledged that operating costs would increase because of increased CO2 transportation costs.

Horisont said there were several CO2 storage licenses in the North Sea with a timeline that fitted with the Barents Blue development. However, they did not specify which licenses.

"Since the award of the Polaris license in 2022, there has been several new CO2 exploration licenses awarded in the North Sea," the CEOs said. "Some of these licenses have matured and are well into project development. This provides new options for the Barents Blue project that we as a prudent project developer must explore."

Horisont is to make a concept selection for Barents Blue later by the end of 2024.

Barents Blue ammonia

Barents Blue is to have a CO2 capture rate of over 99%, Horisont said. The project has already secured a power supply agreement for the first phase of the project.

It will source gas from the Snohvit field, which is processed at the Hammerfest plant on the island of Melkoya.

Hydrogen for the ammonia production will be produced via autothermal reforming plus CCS.

Horisont said the plant will use about 30 MMBtu of natural gas per ton of ammonia produced.

The company is also conducting a strategic review to raise medium and long term capital, Kallestad told Commodity Insights by email in September.

The funds are to go toward costs as the company matures its projects toward FID.

Kallestad said Barents Blue ammonia would be competitive in the market, and did not face the same sorts of challenges as the blue hydrogen projects that Equinor and Shell have cancelled in Norway.

"The hydrogen strategies that Equinor and Shell seem to have pursued are of a different magnitude compared to Barents Blue," he said. "This leads to a higher level of complexity, requiring a more extensive commercial effort toward the markets, and significantly higher capital deployment compared to the Barents Blue project based on our understanding."

The Norwegian government is supporting the project with a grant of NOK482 million under the EU’s Important Projects of Common European Interest program for hydrogen, Hy2Use.