Scotland strengthens links with China in CCS opportunity

The Scottish Government and its main economic development agency, Scottish Enterprise, are contributing £50,000 each towards the project. This will help Scottish research institutions and businesses to engage in this emerging Chinese market.

Supporting the UK-China (Guangdong) CCUS Centre, the funding will help to establish a CO₂ capture test site at the Haifang coal-fuelled power plant, as well as a pre-front end engineering and design (FEED) study to build CO₂ capture, transport and storage technology at a newbuild 8GW coal-fired power station in the province of Guangdong.

Minister for Business, Energy and Tourism, Fergus Ewing, said: “China is one of the world’s largest energy producing and consuming countries. As a proportion of the world’s atmospheric emissions, it releases over a quarter of the total emissions of carbon dioxide - and this trend is rising. As a result, China is facing increased pressure to reduce its CO₂ emissions.

“Scotland’s energy industry is a recognised leader and is proven to work in partnerships around the world. Forty years of oil and gas production has created a strong supply chain, a skilled workforce, a renowned academic sector and well-developed energy infrastructure. These skills can be readily transferred to the CCS industry.

“Scotland is at the forefront of CCS and CO₂ enhanced oil recovery research, and we are looking to strengthen Scotland’s co-operation with China.”

Scottish Enterprise’s international sector head for oil and gas, David Rennie, added: “Providing early support to China on its CCS journey will help put Scotland firmly in the limelight for future opportunities. It will provide us with new connections in the Chinese energy industry, enabling us to demonstrate our world-renowned industry and academic expertise in the oil and gas sector.”

Guangdong is an engineering and manufacturing powerhouse for China, but relies largely on coal-fuelled electricity. The proximity of offshore oil and gas fields is expected to provide abundant opportunities for the storage of CO₂ – as the North Sea does for Scotland. This offers opportunities for the service sector and oil and gas operators – especially those which have already gained expertise in the UK’s CCS Commercialisation competition or are engaged in current commercialisation projects.

A steering group involving Scottish Enterprise, the Scottish Government and academics from the Scottish Centre for Carbon Capture and Storage (SCCS), will ensure Scotland’s financial contribution is spent in areas which will highlight the Scottish supply chain’s expertise, whilst working in collaboration with the UK-China (Guangdong) CCUS Centre.

China has already undertaken some 20 demonstrations and pilot projects of CCS technology, and is expected to include a strong commitment to practical CCS construction in its next five year plan.

SCCS team leader, Philippa Parmiter, said: “China is a major and rapidly expanding market for CCS and we expect this strong growth to continue in the coming years. Our link with Guangdong enables us to build relationships and jointly develop CCS opportunities in a region with many similarities to Scotland.”

Secretary General of UK-China (Guangdong) CCUS Centre, Xi Liang, said: “The collaboration between Scotland and UK-China (Guangdong) CCUS Centre would be a great opportunity for cost reduction in CO₂ storage and for establishing a global CCUS supply chain. I appreciate the early support of two Scottish institutes to the Guangdong CCUS initiative in July 2013, SCCS based at University of Edinburgh and Howden Group based in Glasgow.

“We are very grateful to the Scottish Government and Scottish Enterprise for their financial contribution. The new funding is an exciting opportunity and will help to forge a concrete foundation for the CCUS demonstration programme in Guangdong. ”

China offers many opportunities to grow Scotland’s oil and gas sector and last week 12 companies participated in the Scottish pavilion at China (Beijing) International Offshore Oil & Gas Technology Conference (CIOTC).

Supported by Scottish Enterprise through its international arm, Scottish Development International (SDI), the mission aimed to enhance the companies’ abilities to partner with organisations in China, not only by meeting other companies during the conference but also through engagement with members of the international GlobalScot network which offer unique insights into the operating environment of markets around the world.

China has been increasing its oil and gas investment in Scotland during the past few years - CNOOC’s acquisition of Nexen, Sinopec’s 49 per cent share in Talisman Energy (UK)’s North Sea business and PetroChina’s 50 per cent ownership of the Grangemouth oil refinery – a real indication of the huge potential in oil and gas co-operation between China and Scotland.

David Rennie added: “Participation at the 4^th CIOTC is an important platform for us to develop links with the Chinese market. It enables us to showcase Scotland’s strengths in the sector and gives companies the opportunity to meet new and important contacts which can help deliver their long term growth ambition in this key market.

“Helping companies enter new markets overseas, and increase their global reach, is a key priority for us, and this year’s visit has helped us achieve just that.”

Surface Active Solutions Ltd based in Livingston has been active in China for the last three years and is hoping the mission will help expand its market presence further. The company provides chemical products to oil service providers primarily for cleaning drilling mud, and to waste management companies for waste treatment applications.

Managing director of Surface Active Solutions Ltd, John Harrison, said: “This is our second visit to CIOTC. Our initial visit resulted in a deal to set up a distributor to service the industry based in Beijing. Our Initial sales have been achieved through the distributorship agreement and SAS is now looking to build on this success.

“We have worked closely with SDI for a number of years, helping us boost our exports in both Europe and USA markets. With a new focus to grow our Chinese exports, we’re extremely grateful to SDI for the help and support they have provided to help us achieve our ambition.”

The Scottish pavilion at CIOTC in Beijing last week presented its strengths in innovative equipment and advanced technologies in manufacturing and oil and gas exploration & development.

CCS companies seeking engagement with Guangdong are welcome to contact Philippa Parmiter at www.sccs.org.uk