North Sea operator Harbour Energy (LON:HBR) is set to withdraw from its share of the Medway Hub Camelot carbon capture and storage (CCS) project.
Harbour inherited its 50% share in the CCS project licence following its recent £11.2 billion acquisition of German rival Wintershall Dea.
On Thursday, Medway Hub Camelot joint venture partner Synergia Energy said Harbour gave notice it would withdraw from the licence as part of a “rationalisation of its CCS portfolio”.
Harbour remains involved in the Acorn and Viking CCS projects in Scotland and the Humber respectively.
Medway Hub Camelot CCS
The North Sea Transition Authority (NSTA) awarded Synergia and Wintershall the licence covering the depleted Camelot gas field in August 2023.
Located around 30km off the coast of Norfolk, the field could hold up to 95 million tonnes (Mt) of CO2 with yearly injection rates of 6.5 Mt per annum.
Synergia is targeting a final investment decision on the project in 2028, with first injection of CO2 in 2030.
The company plans to store captured CO2 offshore using shuttle tankers and a floating injection, storage and offloading (FISO) vessel.
The CO2 will be sourced from three gas power plants near the Grain LNG terminal close to London.
© Image: National Grid Grain LNGSynergia said it will now take on 100% of the interest in Medway Hub Camelot, subject to NSTA approval, and seek out a new joint venture partner.
Synergia chief executive Roland Wessel said the company believes the project continues to have “significant technical and commercial merit”.
“The company remains committed to progressing the project through to commercial operations and is pleased with the technical work undertaken to date on the project, which has reinforced its potential long term value to shareholders,” Wessel said.
Panmure Liberum analyst Ashley Kelty said he remains confident that Synergia will secure a new partner for Medway Hub Camelot.
“While this is disappointing for Synergia, it is not a huge surprise as three CCS projects would stretch Harbour’s technical abilities, and Camelot was always going to be left out,” Kelty said.
He added the withdrawal “is no reflection on the quality of the project” as Harbour “could not admit their other projects may be of lesser quality than Camelot given their historic investment in Acorn and Viking”.
“With the importance of CCS for the UK to meet its net zero target, we remain confident that Synergia will secure a new partner to develop this material project,” he said.
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