Aker says to build $159 million carbon unit
OSLO (Reuters) - Norwegian industrial group Aker ASA said it and a partner will invest 875 million crowns ($159.3 million) to build a facility to capture carbon dioxide emissions, saying it will be the first and biggest of its kind.
Aker predicted that building such plants for industrial and power plants around the world could become a business as important as building oil platforms, and that it could make money out of helping to solve the global climate crisis.
Separately engineering group Aker Kvaerner said it would take a 30 percent stake in the company Aker Clean Carbon, which will run the project, transfer its carbon capture technology to it and provide engineering and construction.
"The facility will be in operation as early as 2009, removing carbon dioxide from exhaust emissions," Aker ASA, which will own 70 percent of Aker Clean Carbon, said in a statement.
Carbon capture and storage (CCS) is a pioneering technology, and industry has big hopes that it can be commercialised to help tackle problems relating to emissions of greenhouse gases.
"The objective is the development of construction methods and effective execution models that make carbon sequestration so inexpensive that it becomes cheaper to clean emissions than to pollute," Aker said.
"The new CO2 capturing unit at the gas power plant at Kaarstoe is likely to become the world's first and largest CO2 capture facility of its kind," Aker Kvaerner said.
Aker Kvaerner Chief Executive Martinus Brandal said in the statement that the project was an important step towards commercialising Aker Kvaerner's carbon capture technology, which it calls "Just Catch."
The world's 4,000 largest industrial and power generation plants are estimated to generate about 40 percent of CO2 releases to the atmosphere, Aker said, adding that a new coal-fired power plant is completed each week in China.
"These plants worldwide constitute our future market," Aker ASA Chairman and Chief Executive Leif-Arne Langoy said in the statement.
Frederic Hauge, head of environmental group Bellona, said that the total market for carbon capture and storage (CCS) is estimated to be worth $1.5 trillion to $2.0 trillion per year.
"That is the potential market in power production, oil, coal, and clean-up equipment for refineries," Hauge said in a presentation.
Hauge added that Bellona estimates that a third of carbon emission cuts up to 2050 could come from CCS.
"In just a few decades, building carbon capture facilities can become an industry similar to the building of oil platforms today," Langoy said. "Our goal is to put Aker Clean Carbon at the forefront as this environmental industry matures."
"In short, we see opportunities to make money by helping to solve the current climate crisis," Langoy said.
Shares in Aker ASA, which is controlled by Norwegian tycoon Kjell Inge Roekke, traded up 0.8 percent at 267 crowns by 1317 GMT. Aker Kvaerner shares were off 0.5 percent at 100.50 crowns. Both underperformed a 3.4 percent rise in the Oslo bourse benchmark index.
(Reporting by John Acher and Joergen Frich; Editing by David Holmes/Elaine Hardcastle)