Costs soar for Norway Mongstad CCS centre-paper

Thu Sep 30, 2010 8:08am GMT
 

* Costs rise ninefold from original estimates-daily

* PM says harder, more expensive, than thought

OSLO, Sept 30 (Reuters) - Building a carbon capture storage (CCS) test centre at the Statoil- (STL.OL: Quote) operated Mongstad refinery in Norway will cost nearly nine times as much as planned, a Norwegian daily reported Thursday.

The budget for the CCS facility, considered by the International Energy Agency as a key technology to fight climate change, has risen to 6 billion crowns ($1.02 billion) from 700 million estimated in 2006, according to Dagens Naeringsliv.

"If we don't have CCS, it will be very difficult to achieve big cuts in carbon emissions," Norwegian Prime Minister Jens Stoltenberg was quoted as saying.

"That's why we must believe in CCS even though it is proving more difficult, or more expensive, than people thought a few years ago."

CCS may cut the contribution of coal and gas-fired power plants to global warming by trapping and burying the greenhouse gas carbon dioxide (CO2), but it is untested on a commercial scale.

The Mongstad project was initially seen as one of the first to start full-scale operation, but has been plagued by setbacks. [ID:nLDE64103B]

It is also a prestige project for Stoltenberg, who once said CCS would be Norway's equivalent of the U.S. Apollo project of the 1960s that put astronauts Neil Armstrong and Buzz Aldrin on the moon.

Operator Statoil has a 20 percent share in the Mongstad test centre, Royal Dutch Shell (RDSa.L: Quote) has 2.44 percent, South Africa's Sasol (SOLJ.J: Quote) has 2.44 percent, while the Norwegian state holds 75.12 percent. (Reporting by Gwladys Fouche; editing by James Jukwey)

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