Sir Jim Ratcliffe’s audacious plan to store carbon deep beneath the North Sea

Ineos rig - Project Greensand, Blue Water Shipping, Noble Corporation, Bjarne Andersen Nini-platformen
Ineos rig - Project Greensand, Blue Water Shipping, Noble Corporation, Bjarne Andersen Nini-platformen

More than 12 miles west from the Danish coast, the Siri oil rig sits squat amid the North Sea gloom, buffeted by two-metre high waves.

Producing oil since 1999, days on the rig “look a bit like each other when you are out here,” says maintenance manager Peter Bjeer.

Yet after decades of profitable monotony, the Ineos-owned rig is changing.

Sir Jim Ratcliffe, Ineos’s billionaire owner and founder, is planning to repurpose the vast, depleting oil reservoirs around Siri as giant storage capsules for carbon dioxide, preventing it from going into the atmosphere.

It is a somewhat stunning reversal: rather than digging out fuels that add to emissions, Ineos now wants to suck them back up and lock them away.

Project Greensand, which Ineos is developing with partners including German oil and gas giant Wintershall Dea, is one of several carbon capture and storage projects being developed around Europe, as part of efforts to tackle global warming.

There is a lot at stake: fossil fuels are proving hard to quit for industries ranging from steel to aviation. Some industrial processes, such as making cement, involve chemical reactions that lead to emissions regardless of the fuel. In many cases, carbon capture is the only viable option.

Sir Jim Ratcliffe of global chemical company INEOS - Martin Rickett/PA Wire
Sir Jim Ratcliffe of global chemical company INEOS - Martin Rickett/PA Wire

The International Energy Agency estimates around 1.3 gigatonnes per year of carbon dioxide will need to be captured and stored per year by the end of the decade to meet climate goals, up from a fraction of that currently. Initiatives like Project Greensand will be key to meeting this target.

Siri’s platform is surrounded by 360 degrees of washed out blue North Sea waters, the land long ago disappeared from view.

It’s a relatively mild six degrees centigrade during a visit on Thursday but feels about three with the chill from a 12-knot wind. A pipe at the heart of the platform feels as warm as a radiator, however: oil is gushing through it, pumped up from wells almost two miles underground.

“It’s about 65 degrees when it comes up,” says Ineos’s Peter Hindsberger. “This type of oil is extremely good; wanted by lots of refineries.” A vast red tanker has pulled up nearby to ship the product to Rotterdam.

After more than two decades of extraction, Siri’s output is waning. More and more water comes up with the oil. It now produces about 3,000 barrels per day, compared to more than 30,000 during its heyday.

At the same time, fossil fuels are getting pushed aside in the fight against global warming.

Denmark, once Europe’s third largest oil and gas producer, plans to end oil and gas production by 2050. Petrol and diesel cars are on the way out. Even the man in charge of Ineos’s energy business in Denmark, Mads Weng Gade, drives a Tesla.

Pivoting Siri from oil to carbon capture is therefore a savvy business move as well as an environmental effort.

Yet it is far from clear whether practical, commercial and regulatory hurdles will fall in time to get carbon capture projects up and running at the scale climate experts say is needed.

“It’s still early days,” Ineos’s Mr Gade admits.

Carbon capture from factories and smelters is yet to be tested at scale, despite the huge pressure to cut down due to hefty charges for emissions. Technology to do so is at an early stage and expensive.

The long-term cost of storing carbon dioxide is another unknown, given that the idea is to store carbon dioxide permanently.

Oil and gas drillers are used to taking on long-term responsibilities over oil and gas wells including decommissioning. But regulation in this area for carbon capture is still being developed.

“Once we get the technology in place, we will know a lot more about [can we] do this in a reasonably priced way,” says Mr Gade. “There’s a lot which still needs to be matured.”

The carbon capture side will likely need state help, he adds. “I believe the price will come down over time, because you can scale this up. But in the beginning, it needs a push.”  

Undeterred, Ineos is forging ahead. A ship has set off from Antwerp loaded with 800 tonnes of liquified carbon dioxide captured from Ineos’s ethylene plant in Zwijndrecht, Belgium.

Denmark has agreed to allow gas from Belgium to be taken into the country, the first agreement of its kind, given rules blocking cross-border transport of waste.

Ineos will pump the carbon dioxide into a depleted oil reservoir near the Siri rig, more than a mile under the seabed. Over several months, it will test how the sandstone reacts, and how the carbon dioxide behaves. Lab tests have also been “positive”.

Ineos knows the reservoir well, having pumped oil and injected water into the reservoir for years. It took over from Dong Energy, now wind developer Orsted, in 2017, part of an expansion beyond its core chemicals empire.

Mads Weng Gade Ineos - Project Greensand
Mads Weng Gade Ineos - Project Greensand

But Mr Gade, 44, concedes, “it’s different when you start doing it in real life. You suddenly start injecting bigger amounts of carbon dioxide into the reservoir. So we need to see how it is.”

If the pilot phase goes well, Ineos and partners including Wintershall Dea will give the go ahead to the full project: potentially billions of pounds of spending to develop storage capacity for up to 1.5 million tonnes of carbon dioxide per year by 2025, rising to up to eight million tonnes per year by 2030.

Storing emissions is a huge commercial opportunity for Ineos, one of Britain’s largest private companies with more than 26,000 workers around the world.

Apart from developing a business storing others’ emissions, Ineos also needs to slash emissions from its own chemicals plants and refineries. The company operates a $65bn-revenue empire ranging from Grangemouth in Scotland to Tianjin in China, producing large amounts of harmful emissions across its portfolio.

It is looking at sending about one million tonnes of carbon dioxide per year by 2027 from Grangemouth to a storage project being developed on the UK side of the North Sea, known as Acorn.

Capturing carbon and shoving it underground cannot be the only solution, however. Industry is also under pressure to convert to new technologies which do not produce carbon emissions.

“If you think of the space to store carbon dioxide as limited, then you start asking the question, what should you really use the space for?” says Michael Liebreich, energy expert and chairman of Liebreich Associates.  

“And clearly, you should use them for as few things as possible.” The cement industry would be a prime candidate, he notes, given the process emissions it cannot avoid.

For workers on Siri, however, the promise of a future in carbon capture helps take the edge off the anxiety of being in an industry whose days are numbered.

Workers here get three weeks holiday onshore for every two weeks on the rig. Time outside of shifts is spent working out, playing pool, or watching the news. Turkey stew and sausage with apple sauce was on the menu this Thursday. Books including Jo Nesbo’s ‘Blood on Snow’ thriller are on the shelves. Mr Bjeer's mornings start on the treadmill at 4.30am, covering miles despite the confined space.

“With regards to the injection [of carbon dioxide], we do something similar anyway – that won't be the problem here,” he says.

“It will extend the lifetime of the installation and of people’s jobs. Everybody's excited about it.”