Credit: Net Zero Teesside
Net Zero Teesside Power and Northern Endurance Partnership announce huge wave of new construction contracts
Net Zero Teesside Power (NZT Power) and the Northern Endurance Partnership (NEP) have today revealed the nine firms selected for around £4bn of engineering, procurement, and construction contracts, which are set to support the delivery of a series of low carbon infrastructure projects across the north east.
The projects include NZT Power, which aims to deliver a fully integrated gas-fired power and carbon capture project that could generate up to 860MW of low-carbon power. The joint venture between BP and Equinor is designed to capture up to two million tonnes of CO2 a year that would then be transported and securely stored by the NEP - a separate joint venture between BP, Equinor, and TotalEnergies - beneath the North Sea.
The companies said NZT Power could create and support more than 3,000 construction jobs and then require around 1,000 jobs annually during operations through to 2050.
Onshore NEP infrastructure would also serve a range of Teesside-based carbon capture projects, including NZT Power, H2Teesside, and Teesside Hydrogen CO2 Capture, which were selected for the first connections to the East Coast Cluster by DESNZ in March 2023.
It is anticipated that around four million tonnes of CO2 a year from these projects would be transported and stored from 2027.
The developers today confirmed Technip Energies and the GE Vernova consortium - including Balfour Beatty as the construction partner and Shell as the technology licensor - have been awarded an onshore power, capture and compression contract, while construction firm Costain has been selected for an onshore CO2 gathering system and gas connection contract.
Marubeni-Itochu Tubulars Europe with Liberty Steel Hartlepool, Corinth Pipeworks and Eisenbau Kramer GmbH as the nominated pipe-mills, have also been selected for an onshore and offshore linepipe contract, while Alcatel Submarine Networks has been selected as power and communications cable partner.
Further contracts have been awarded to Saipem, TechnipFMC, Genesis and Wood for a range of offshore and project management services.
The contract awards represent another step forward for the high profile projects. However, they are all subject to the receipt of relevant regulatory clearances and positive final investment decisions from the project developers and the UK government.
The government is facing increasingly vocal calls from the nascent carbon capture industry for Ministers to finalised the policy framework and subsidy mechanisms that would allow the pipeline of CCS projects to advance. Last week's Spring Budget provided no update on the government's CCS plans, prompting Ruth Herbert, chief executive of the Carbon Capture and Storage Association to warn the government was at riskj of squandering a major economic opportunity.
"The UK's CCUS industry is still waiting for the funding announced in last year's spring budget to be committed to projects, with final investment decisions for projects in the north-west and north-east of England needed in the next few months," she said. "Today's Budget was a missed opportunity for the government to put in place a longer-term revenue support envelope for the next wave of projects - to provide the level of certainty they need to move forwards.
"Without this, the UK risks losing the opportunity to attract around £30bn of private investment into UK CCUS by 2030, which would create and protect tens of thousands of jobs and transform industrial regions across the UK."
According to today's announcement, contractors will continue working with the local and regional supply chain in prepartion of final investment decisions, with further engagement taking place over the coming weeks and months.
Ian Hunter, managing director at NZT Power, described the selection of contractors as a "major step" forward for the project.
"We have selected world-class partners who have the experience and capability needed to deliver," he said. "We aim to take final investment decision in September 2024 or before, after which we'd look forward to working with our EPC partners through the construction phase".
Chris Daykin, general manager of the NEP, said today's update was a "clear signal of momentum" within the East Coast Cluster.
"The Northern Endurance Partnership's CO2 pipelines are essential to connect carbon intensive projects to offshore storage and would play an important role in helping the region pursue its net zero plan".
The news was also welcomed by Tees Valley Mayor Ben Houchen, who said the transformational economic impact across Teesside, Darlington and Hartlepool cannot be understated.
"This would be the single biggest investment in Teesside since Imperial Chemical Industries," he said. "Our area is now the world-leading centre in developing the clean, green industries of the future, which most importantly will deliver the highly-skilled well-paid jobs of the future.
"This investment of £4bn will support businesses up and down the local supply chain with companies like Hartlepool-based Liberty Steel already netting a multi-million-pound contract.
"I will continue to work to ensure local British firms benefit from this colossal investment as this world first project moves forward to final investment decision in September this year".
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