UK’s major BP (LON: BP) and peer PetroChina (SHA: 601857) will work together on the construction of an onshore carbon capture, utilization, and storage (CCUS) cluster in Hainan, the southernmost province of China, global oil and gas news source Upstream reported.
The collaboration was formalized via a memorandum of understanding (MoU) signed between BP’s China arm and China Southern Petroleum Exploration and Development, an onshore outfit of PetroChina.
For the Hainan project the companies will draw expertise from BP’s Net Zero Teesside Power project, the first gas-fired power plant with CCUS technology in the UK. The project, with expected output of up to 860 megawatts of low-carbon electricity, will capture and store up to 2 million tons of carbon dioxide (CO2) per year.
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The global need for low-carbon energy is growing, but it also needs to be secure and affordable, which is a complex challenge, BP’s CEO Bernard Looney was quoted as saying, adding that CCUS is gaining momentum.
According to the chief executive, the MoU is part of a strategic partnership signed in 2015 between BP and PetroChina’s parent, state-owned China National Petroleum Corporation, which was recently extended to 2026.
Among the initial goals of the framework agreement were the expansion of the cooperation on international projects, shale gas exploration and development, and fuel retailing ventures in China. With the recent MoU the list has been extended to include low-carbon projects.
China Southern Petroleum’s production currently amounts to 6,000 barrels of oil per day from the Fushan oil field in Hainan.
According to information obtained by Upstream, the company has planned the construction of CCUS projects in Hainan with capacity of 1 million tons of CO2 per year, which can be increased to 10 million tons per year in the future.
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