Costain, bp and Equinor have received confirmation to proceed to the execution phase for two East Coast Cluster projects on Teesside.
Construction is expected to commence from mid-2025, with start-up targeted for 2028.
Energy Secretary Ed Miliband said the investment launches a new era for clean energy in Britain, boosting energy security, backing industries, and supporting thousands of ‘highly skilled jobs’ in Teesside and the North East. It follows the government’s decision in October to invest £22bn in hydrogen and carbon capture and storage (CCS) in the next 25 years (click here).
Costain’s delivery partner role will see it deliver and manage the engineering, procurement and construction (EPCm) of the Northern Endurance Partnership’s (NEP) onshore CO2 gathering system on Teesside, and associated utilities for Net Zero Teesside Power (NZT Power). It is one of nine EPC contractors selected by NZT Power and NEP to deliver the scheme.
The combined value of the NZT Power and NEP investment programme is around £4bn.
NZT Power – a joint venture between bp (75%) and Equinor (25%) – aims to be the world’s first gas-fired power station with carbon capture and storage, whilst NEP will provide the CO2 transportation and storage infrastructure for three Teesside-based carbon capture projects: NZT Power, H2Teesside and Teesside Hydrogen CO2 Capture. NEP is a joint venture between bp (45%), Equinor (45%), and TotalEnergies (10%).
The confirmation to proceed follows Costain’s successful completion of the front-end engineering design (FEED) for the carbon capture network, and its appointment to deliver the FEED for the East Coast Cluster’s hydrogen network.
Sam White, Managing Director, Natural Resources at Costain, said the announcement is a significant step towards UK decarbonisation.
“In addition to the environmental benefits, these projects will revitalise the local economy, creating jobs, developing skills and improving people’s lives across the Teesside region,” he said.
Ian Hunter, Managing Director, Net Zero Teesside Power, said it marked the culmination of years of work to make Net Zero Teesside Power a reality.
“As the project progresses into the execution phase, we look forward to delivering on our ambition to create and support thousands of jobs whilst generating flexible, dispatchable low-carbon power for the UK,” he said.
Chris Daykin, Director, Northern Endurance Partnership, said it was a major moment in the development of CCS infrastructure and the UK’s ambition to reach Net Zero emissions by 2050.
Felipe Arbelaez, bp’s Senior Vice-President of Hydrogen and Carbon Capture & Storage, said the progress of these projects to financial close is a demonstration of the power of the private and public sectors coming together to deliver integrated low carbon energy projects.
“They will create value for the region, partners, customers and bp. The projects further demonstrate bp’s focused and value–driven strategy for hydrogen and CCS – delivered together with our partners while maintaining our disciplined capital-light model,” he said.