BP to pull out of Peterhead carbon capture, storage project UPDATE

BP to pull out of Peterhead carbon capture, storage project UPDATE

	Published : Wed, 23 May 2007 17:56 By : Agencies Print this Story

(Adds quotes, details)

LONDON (Thomson Financial) - BP PLC said it was pulling out of its planned Peterhead carbon capture and storage project in Scotland because its plans did not 'mesh' with the timing of a government-sponsored competition to build such a plant.

Trade Secretary Alistair Darling confirmed an announcement in March's Budget to hold a competition to build a commercial-scale carbon capture and storage plant.

The competition will start in November, but BP spokesman David Nicholas said the date was 'an extension too far for this project'.

He told Thomson Financial News BP had spent 50 mln usd on the Peterhead project in the last 18 months.

The company had planned to use the Miller oil field in the North Sea to store CO2 and in turn generate 475MW of electricity.

Miller was an attractive option as it was 'coming towards the end of its life' and already had a pipeline running to it which could be used to pump the CO2, Nicholas said.

However, the company had already pushed back a closure date on the basis that it might receive government funding, and could no longer afford to keep it open now a guarantee could not be made.

The news will be a blow to the government on the day it published its energy White Paper, but Nicholas was keen to stress that BP appreciated an open competition process had to be conducted especially when public funds were being offered to the winner.

'I think both sides were always clear about our two timescales,' he said.

He added that BP would consider participating in another carbon capture project with other firms using the knowledge it had collected from Peterhead.

The firm is investing in two similar schemes in California in the US and near Perth in Western Australia.

tf.TFN-Europe_newsdesk@thomson.com

fp/lam

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.