Essar Oil UK to build £360M carbon capture facility

Essar is investing over GBP 1 billion (≈ EUR 1.16 billion) into a range of energy efficiency, fuel-switching, and carbon capture initiatives, designed to decarbonize its production processes significantly by 2030 and put Essar at the forefront of the UK’s shift to low carbon energy.

According to the company, its energy transition strategy is based on five principles: running the core Stanlow refining processes as efficiently and safely as possible; decarbonizing Stanlow’s operations; building a hydrogen future through the launch of Vertex Hydrogen (Vertex) and as a key part of the HyNet consortium; developing green fuels including sustainable aviation fuels (SAF); and establishing the UK’s largest biofuels storage facility through Stanlow Terminals Ltd.

Essar says that it will achieve its decarbonization targets through a combination of incremental (energy efficiency and operating improvements) and transformational projects, including this announced GBP 360 million (≈ EUR 417.7 million) carbon capture plant but also as a result of the significant investments it is making into hydrogen and biofuels.

Pre-FEED contract awarded

Kent plc has been awarded a pre-FEED engineering contract to develop the facility that will take the carbon dioxide (CO₂) emitted from one of Europe’s largest full-Residue Fluidised Catalytic Cracking (FCC) units, located at the Stanlow refinery.

The gas will be permanently sequestered into depleted gas fields under the sea in Liverpool Bay, as part of the HyNet cluster infrastructure in the North West of England.

Once complete in 2027, the plant will eliminate an estimated 0.81 million tonnes of CO₂ per annum, eliminating nearly 40 percent of all Stanlow emissions.

The project has been selected by the Department of Business, Energy and Industrial Strategy (BEIS) as a Phase-2 winner in the carbon capture utilization and storage (CCUS) cluster sequencing process earlier this summer, and as such, is currently progressing through the due diligence stage.

This new carbon capture plant is the single biggest initiative to decarbonize our processes and a core element to our hugely ambitious decarbonization strategy. Our ambition is to become a leading low-carbon refinery. This is a massive undertaking, but it is a journey we are fully committed to. Not only is it the right environmental thing to do, but it will future-proof the critical Stanlow refinery for the long term, protecting jobs and industry, while also placing Stanlow at the very centre of the UK’s energy transition, said Deepak Maheshwari, CEO of Essar Oil UK.

Hydrogen furnace

Essar is already making rapid progress against its broader decarbonization targets and had signed a ‘Heads of Terms’ offtake agreement in September 2022 with Vertex, a joint venture with Progressive Energy, for the supply of some 280MW of hydrogen.

The hydrogen will be used to help decarbonize Essar’s existing production facilities including the new hydrogen-powered furnace which was delivered in August this year.

The GBP 45 million (≈ EUR 52.3 million) furnace is the first of its kind in the UK, capable of running on a 100 percent hydrogen source, and will replace three existing furnaces at Stanlow.

Vertex is developing the first large-scale, low-carbon hydrogen production hub in the UK, as part of the HyNet cluster.

This will produce (in its initial phases) 1GW of hydrogen (the equivalent energy use of a large UK city like Liverpool) and capture some 1.8 million tonnes of carbon per annum.

By 2030, Vertex expects to deliver nearly 4GW of low-carbon hydrogen, equivalent to circa 40 percent of the UK Government’s national target.