Energy_Transition

Maritime giant NOV joins floating wind megaproject 'to halve' North Sea oil emissions

Cerulean Winds-led $14bn development would use 3GW deepwater turbine array to electrify oil & gas complexes while sending power to shore to run green hydrogen plant from 2024

CGI of floating wind unit at Cerulean Wind project site in North Sea
CGI of floating wind unit at Cerulean Wind project site in North SeaFoto: Cerulean

A £10bn ($14bn) energy megaproject that could more than halve current greenhouse gas emissions from Britain’s offshore oil & gas operations by 2025 using a vast fleet of floating wind turbines linked to an onshore hydrogen plant has taken a lead-off step with developer Cerulean Winds naming its first ‘delivery partner’.

Marine contracting giant NOV will supply the platforms and mooring spreads for the 200-unit project, which is calculated capable of cutting out over 9 million of 18 million tonnes of CO2 expected to be produced from the hydrocarbon province by mid-decade.
Cerulean, speaking to Recharge before the announcement, said the order was the first of “four of five big pieces” making up the project, which will employ a 3GW array of floating turbines to electrify offshore oil complexes in the central and northern North Sea, with large volumes of power carved off and conveyed to shore to run a 1.5GW green hydrogen facility.

“As the largest provider of marine equipment and wind vessel designs working in this space, the experience and knowledge they will bring to a project of this magnitude is second to none. Having them on board brings the scheme a step closer to reality,” said Cerulean co-founder Mark Dixon, a petroleum sector veteran who set up the company with oil industry colleague Dan Jackson.

“We have a number of Tier 1 delivery stakeholders signed up. They are some of the largest providers in the world, with the scale and capacity to deliver,” he added, with further contracts to be sealed “in the coming months”.

“The floater and the mooring systems together is the key piece of the project, but of course there is the hydrogen facility, the transmission cables, the installation work for the turbines and also the substations still to come.”

Planned for construction over two sites in the West of Shetland and in Central North Sea called ‘Aspen’ and ‘Beech’, the floating wind array will be based around steel semisubmersible platforms, given the designs “versatile” fieldwork over decades in the offshore oil & gas, and its suitability to fabrication and assembly in yards serving the North Sea,” said Dixon.

“We started the journey agnostic to the platform type but with a couple key criteria – and this is based on our knowledge from the deepwater oil & gas sector over the last 20 years: it had to be steel to meet local content requirements and it had to be a semisub because it is versatile structure and is well-proven design for any environment.”

'Oil industry expertise and experience'

Jackson adds: “The other criterion was that we have the backing of a Tier 1 marine contractor like NOV. This is very important because it goes to the decades of knowledge and scale of company that is coming to the table here.

“This is oil industry bringing expertise and experience to the wind industry. This is the clearest crossover of domain knowledge. And it needs to be given we will be building this project in one of the most hostile environments on the planet.”

Cerulean has submitted a formal request for seabed leases for the project to Marine Scotland but “timing involved in gaining approvals for the project is critical”, said Jackson, for the company to be able to reach financial close in Q1 2022 and have the project infrastructure built and then power ramping up between 2024-2026.

To this end, Cerulean has asked the Scottish and UK governments to make an “exceptional case to deliver an extraordinary outcome” in speeding the decarbonisation of one of the biggest offshore oil basins in the world.

Jackson spotlights that the targets set in the UK’s recently published North Sea Transition Deal call for a reduction in offshore emissions by 10% by 2025 and 25% two years later: “To achieve that, preparatory work must begin now if those targets are to be met. Failure to do so undermines the objectives of the deal.”

“The [UK and Scottish] regulators across the board all understand the urgency that oil & gas operations are rapidly decarbonised. The mission is very clear: get rid of the oil & gas emissions as quickly as possible or we’ll miss the North Sea Transition Deal targets and all the other [climate] targets. And that would be a loss for everybody.”

“If [offshore oil & gas] assets don’t reduce their CO2 emissions by the mid-2020s, increased emissions penalties through carbon taxes will see many North Sea fields become uneconomical and move them towards decommissioning by the end of the decade at the cost of thousands of jobs,” Jackson added.
Cerulean is targeting a levellised cost of energy (LCOE) for the project of under £70/MWh ($99/MWh) – lower than the price of running offshore platforms off gas generators. But the larger prize will be the fast-track development of a supply chain to build the giant development, and behind it the 10GW to be awarded in Scotland’s upcoming ScotWind offshore wind leasing round.

'Staged' supply chain development

Dixon said: “The [Scottish] government will potentially co-invest, to help develop the infrastructure, to build this out, because with ScotWind following on they start to see there is that orderbook lining-up [for construction and servicing of the North Sea offshore wind industry] as we go forward.”

Scotland long-struggling former oil & gas fabrication yards will be engaged “in stages”, starting with component assembly of the floating platforms for the Cerulean project, and then developing the factories that will fabricate future units, said Dixon.

“The Scottish supply chain can certainly get itself to the point where the assembly work – and these are large jobs with massive steel columns and frames – is absolutely possible from the start of the project and potentially toward the end of the project, we are going to be rolling out 200 units remember, a good amount of the fabrication too,” said Dixon.

“This will provide the supply chain to get the investment they need to build out their facilities.”

Joe Rovig, president of NOV Rig Technologies, stated: “This ground-breaking proposal, which will leverage NOV’s core competencies as well as our UK and European infrastructure and personnel in a key energy transition project, will drive major progress in the goal of decarbonising the offshore UK sector.

“NOV is eager to demonstrate our abilities as one of the key partners and household names in the global energy transition, just as it has been for decades in the traditional oil & gas industry.”

Cerulean said it completed all infrastructure planning for the project “to ensure the required level of project readiness”.

Over £60bn in fresh capital is foreseen flooding into the UK offshore wind industry in the next five years, according to recent research from the Offshore Wind Industry Council. In March the UK government said it would make available £27m for an Energy Transition Zone in Aberdeen, Scotland, in a first step towards delivering a wider North Seas Transition Deal for the oil sector.
The role of floating wind-powered emissions reductions has long been debated by the offshore energy industry, with a lead-off project now moving ahead including Equinor’s Hywind Tampen, which will cut CO2 from the Snorre-Gullfaks oil field by a third, and other operators, including Lundin Energy, considering similar schemes.
Floating wind power projects totalling more than 26GW are on track to be turning by 2035, according to latest figures from Quest FWE, with the fleet expected to grow “exponentially” as the first wave of utility-scale developments now taking shape internationally are boosted by transitioning oil companies and ever-improving economics.
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Published 29 June 2021, 23:32Updated 29 June 2021, 23:42
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