THE ENERGY INDUSTRY TIMES - NOVEMBER 2017
Companies News 9
Oil majors keep faith in CCS
Several oil and gas majors are joining forces to build a carbon capture and storage project in Norway. The move
demonstrates an increasing desire to invest in technologies aimed at cutting carbon emissions. Siân Crampsie
Shell and Total are joining Norwegian
firm Statoil to develop a carbon storage
site on the Norwegian continental shelf
in a move that reflects the companies’
desire to put carbon capture and storage
at the forefront of their strategies.
The three companies have signed an
agreement to become equal partners
in the first phase of a Norwegian
government-backed project to build a
full-scale carbon capture and storage
project.
Gassnova awarded Statoil the contract
for the first phase in June 2017.
The first phase of the project could
reach a capacity of around 1.5 million
tons of CO2 per year.
“Statoil believes that without carbon
capture and storage, it is not realistic
to meet the global climate target as
defined in the Paris Agreement,” said
Irene Rummelhoff, Statoil’s Executive
Vice President for New Energy Solutions.
“A massive scale up of the number
of CCS projects are needed and
collaboration and sharing of knowledge
are essential to accelerating the
development.”
Total’s President of Gas, Renewables
& Power, Philippe Sauquet, said that
the aim of the project was “to develop
viable, reproducible commercial
CCUS model in view of carrying out
other major projects around the
world”.
The storage project will store CO2
captured from onshore industrial facilities
in eastern Norway. The CO2 will
be transported by ship from the capture
facilities to an onshore receiving terminal
on the west coast of Norway. At
the receiving terminal CO2 will be
transferred from the ship to intermediate
storage tanks, prior to being sent
through a pipeline on the seabed to
injection wells east of the Troll field on
the continental shelf.
There are three possible locations for
the receiving terminal, Statoil said,
with the final selection likely to be
made later this year. The project will
help to stimulate investment in the
wider carbon capture and storage industry,
it added.
Oil majors have been increasingly
investing in technologies aimed at cutting
carbon emissions – a trend that has
seen many of them entering the renewable
energy arena. In October Statoil
announced plans to invest in a 162 MW
solar farm in Brazil – its first investment
in the solar energy sector. The
company signed an agreement to buy
a 40 per cent stake in the Apodi solar
farm from Scatec Solar for $25 million.
It will also own a 50 per cent stake in
the project execution company and has
agreed an exclusive cooperation deal
on the joint development of future solar
projects in Brazil.
Dong name change reflects clean energy transformation
ABB moves to
strengthen
electrification
business
n ABB puts share buyback on hold
n GE deal boosts ABB electrification business
Siân Crampsie
ABB says that its planned acquisition
of GE Industrial Solutions will
strengthen its global position in the
electrification market and improve
its access to the North American
market.
The Swiss engineering firm has made
an offer of $2.6 billion for the underperforming
GE unit, which it plans to
bring back “to peer performance” over
time.
GE Industrial Solutions will be integrated
into ABB’s Electrification Products
business. ABB will retain the Industrial
Solutions management team
and will also be able to continue to use
the GE brand.
ABB is expecting to spend $400 million
investing in the new business and
on restructuring costs, and will generate
$200 million in annual cost synergies
after five years, it said. ABB has
put a previously announced share
buyback programme on hold.
“With GE Industrial Solutions, we
strengthen our number 2 position in
electrification globally and expand our
access to the attractive North American
market,” said ABB CEO Ulrich
Spiesshofer. “Combined with the longterm
strategic supply relationship with
GE, this transaction creates significant
value for our shareholders.”
In 2016, GE Industrial Solutions had
revenues of approximately $2.7 billion,
with an operational EBITDA
margin of approximately 8 per cent and
an operational EBITA margin of approximately
6 per cent. This is less than
half the 15 per cent operating margin
at ABB’s comparable Electrification
Products division.
GE has been under pressure to improve
the performance of its business
and the sale of Industrial Solutions is
part of a strategy announced in 2016
by former CEO Jeff Immelt to adjust
its portfolio.
“This combination brings together
two global businesses with a broad
complement of electrical protection
and distribution assets,” said John
Flannery, CEO of GE. “ABB values
our people, domain expertise, and our
ability to operate in the segments
where we have depth and experience.
GE will also benefit through an expanded
strategic supply relationship
with ABB as the two companies work
together.”
Dong Energy’s imminent name change
to Ørsted marks a new chapter in the
company’s transformation from an oil
and gas business to one focused on
clean energy.
The Danish energy company, which
has its roots in the oil and gas business,
has called for an extraordinary general
meeting to approve the move and aims
to start trading as Ørsted at the beginning
of November.
“Dong was originally short for Danish
Oil and Natural Gas. With our profound
strategic transformation and the
divestment of our upstream oil and gas
business, this is no longer who we are,”
said Thomas Thune Andersen, Chairman
of the Board of Directors. “Therefore,
it is now the right time to change
our name.”
The new name references the innovative
Danish scientist Hans Christian
Ørsted (1777-1851), who pioneered
several scientific discoveries, Dong
said. The company has become a leading
developer of offshore wind energy
in Europe as well as emerging markets
in North America and Asia, and has a
vision of “a world that runs entirely on
green energy”.
“Our new name recognises H.C.
Ørsted’s curiosity, dedication and interest
in nature and our brand identity
speaks to the innovation and profound
understanding of nature, which is vital
to create a world that runs entirely on
green energy,” said Henrik Poulsen,
CEO of Dong Energy.
Dong said it would continue to trade
in natural gas as it is a fuel that will
help the transition to renewables.
n Dong Energy has announced that
Goldman Sachs Group Inc is selling
all of its remaining 2.7 per cent stake
in the company. Luxembourg company
New Energy Investment Sarl (NEI),
which is controlled indirectly by Goldman’s
merchant banking division, has
offered its 11.44 million existing shares
in Dong Energy to institutional investors.
NEI was Dong Energy’s second
largest shareholder after the Danish
company’s initial public offering last
year. At the time, NEI held an interest
of 14.7 per cent in Dong Energy.