* UK provides multi-million pound funding for Peterhead CCS
* Government is giving a total 100 mln stg for two CCS
LONDON Feb 24 Shell has secured
millions of pounds of funding from the British government for
the next stage of its carbon capture and storage (CCS) project
at SSE's Peterhead gas plant in Scotland, Shell and the
government said on Monday.
The demonstration project, led by Shell with support from
the plant owner SSE, aims to become the world's first
large-scale CCS project at a gas-fired power plant.
"The government has agreed a multi-million pound contract
for engineering, design and financial work on the Peterhead CCS
project in Aberdeenshire," Ed Davey, Britain's Secretary of
State for Energy and Climate Change.
"If built, the project could save one million tonnes of CO2
each year," he added.
CCS technology captures carbon dioxide emissions from power
stations and other industrial sites. Once captured, the carbon
dioxide is transported to formations deep underground such as
depleted oil and gas reservoirs, where it is stored.
CCS has been proven to work in several small pilot schemes
around the world but has yet to be operated commercially and at
a large scale.
A study last week showed that schemes in the United States,
Canada and China are approaching completion but Europe is
The British government wants to develop CCS to help it meet
both national and international targets to reduce
environmentally-damaging greenhouse gas emissions.
By 2050, CCS could save more than 30 billion pounds ($50
billion) a year in fighting climate change, it said.
The government is investing around 100 million pounds in two
CCS projects in Britain - the Peterhead scheme and the White
Rose project in Yorkshire, which is developing a new coal power
plant with CCS.
The government will make financial investment decisions on
the projects by late 2015.
Peterhead CCS aims to capture and store over 85 percent of
the carbon dioxide emissions from one of the gas plant's three
turbines and is scheduled to be operational by the end of the
"CCS could be critical to reducing carbon emissions at a
time of growing global demand for energy," Ed Daniels, Chairman
of Shell UK, said.
"The successful demonstration of the technology at Peterhead
would be a step towards proving its commercial viability as a
tool for mitigating climate change. It could also help diversify
the North Sea oil and gas industry and so contribute to the
sector's long-term commercial health."