Converging on CCS, companies face heightened competition

With an eye on tackling the big questions around emissions, companies are ponying up to buy into carbon capture and storage (CCS) technologies.

The move has seen operators and service companies converging on the sector as interest grows. While there is often talk of collaboration for the energy industry of the future, competition in the CCS sector may put this aspiration under pressure.  

SLB struck a deal at the end of March to buy a major stake in Aker Carbon Capture (ACC), while a Chevron unit this week paid up to participate in ION Clean Energy. Both ION and ACC are working on amine-based CCS technologies.

SLB announced the deal on March 27. The service company giant agreed to pay 4.12 billion kroner (£304 million) for an 80% stake in ACC Holdings, while ACC will own the remaining 20%. SLB intends to fold its own carbon capture business into the unit.

Depending on how the business performs, SLB may also make contingent payments of up to 1.36bn kroner (£100mn).

“Big Blue” launched its new energy unit in 2020. It has identified CCS as one of the five strands of this group. The company has been working on CCS plans for around 30 years. This comes in addition to its Cynara membrane technology, which can strip CO2 from natural gas streams.

There is a sense that SLB has previously focused more on the storage than the capture side of the CCS business. Buying into ACC should help bolster its capture processes, through the Norwegian company’s Just Catch

Modular move

ACC offers its amine-based Just Catch technology via modular plants, with capacities ranging from 40,000 to 400,000 tonnes per year. The company claims to be able to offer the smallest of these models within 22 months.  

As of 2023, ACC reported a pipeline of projects covering around 40 million tonnes per year of CO2 capture capacity. These include an order from Orsted for five units.

SLB, in its statement, said the deal would combine technology portfolios, expertise and an established project delivery platform. “It will create a vehicle for accelerating the introduction of disruptive early-stage technology into the global market on a commercial, proven platform,” the buyer said.

SLB CEO Olivier Le Peuch noted the importance of tackling costs to be able to roll out CCS plans more widely. The cost of capturing emissions can be as much as 50-70% of the total for a project, he said. The aim of the new venture is to “shift the economics of carbon capture across high-emitting industrial sectors”, Le Peuch noted.

While SLB is expanding its business in the amine-based CCS world as a service company, so too is Chevron from its conventional role as project operator. ION announced the deal on April 4, saying Chevron New Energies (CNE) had led a Series A financing round, which raised a total of $45mn.

Full-cycle CCS

ION said the cash would go to funding its growth and deployment of its ICE-31 liquid amine CCS technology. The statement noted that the Chevron unit would use the technology to provide services to customers with high volume and low concentration CO2 emissions.

CNE could work with ION’s customers, the statement said, to help speed the scaling of the technology. Chevron’s Chris Powers said the company was working on the “full value chain” of carbon capture as a business.  

“ION’s solvent technology, combined with Chevron’s assets and capabilities, has the potential to reach numerous emitters and support our ambitions of a lower carbon future. We believe collaborations like this are essential to our efforts to grow carbon capture on a global scale,” Powers said.

ION has talked about how its ICE-31 technology has high capture efficiency with low energy use. Furthermore, company founder Buz Brown said the process was “exceptionally resistant to degradation with virtually undetectable emissions. That’s a pretty powerful combination that sets us apart from the competition.”

Chevron has bought into CCS technologies in a similar fashion in the past. The company’s Chevron Technology Ventures unit invested in Compact Membrane Systems (CMS) in 2023, while CNE invested in another CCS company, Svante, in 2022. However, the deal with ION marks its first step into the amine-based CCS process.

The amine process is the industry leader and is the most extensively used CCS technology. Industry has deployed amine-based technologies at two high-profile power projects in North America, with CCS facilities at Saskatchewan’s Boundary Dam and Texas’ Petra Nova.

The technology is also in use in Abu Dhabi’s Al Reyadah plant, capturing emissions from steel manufacturing.

Both these plants have encountered various problems, not least with higher than expected operating costs from the amine process.

Heating up the competition

While deploying CCS on power plants is a way to capture big volumes, there is plenty of running room for smaller projects. ACC, for instance, has struck a number of deals to deploy its technology on waste-to-heat facilities in Norway, in addition to pulp plans in the US.

CCS is likely to become an increasingly heated battleground as companies strive to seize the advantage. For service companies, CCS is a clear addition to their work providing the nuts and bolts of the energy industry. For operators, the ability to invest in the full cycle of operations and deploy capital – while potentially securing sources of CO2 for alternative purposes – could be good business.

Traditionally, in the oil and gas business, operators and services have largely stuck to their own areas. Amid the move to CCS, conventional business relationships can be upended – and could lead to some tough conversations in board rooms about business with competitors.