Less than a year ago, we published an article about what was supposed to be Europe’s first full-scale and commercial onshore CO2 storage project, aimed to be operational next year.
But, a couple of months ago, the future of the Stenlille project in Denmark looks a lot less rosy. As part of a round of licence awards towards future carbon storage projects onshore Denmark, the Stenlille project did not receive a storage licence. It has not been in the news a lot, but we stumbled over it when reading a post by Danish company CCUS Partners on LinkedIn.
What is going on?
It has turned out difficult to get some more information about the reasons why the licence was not granted, which leaves us to pull together the few things we do know and draw up some hypotheses.
First of all, what is Stenlille? It was a quite particular storage project all along, because the site is also used as a gas storage project in the crest of a domal structure. The CO2 was supposed to be injected into the Jurassic Gassum Formation in the NE flank of this dome, with reservoir simulations predicting that it would take more than 50 years before the CO2 would ultimately migrate towards and “meet” with the gas storage area. At the same time, because the site has been used to store gas for so many years already, the sealing capacity of the overlying Jurassic Fjerritslev Formation can be seen as tested and confirmed.
The project was not in an initial phase anymore. As said above, the first injection was planned for next year or 2026, with two suppliers of CO2 lined up, and detailed engineering studies had already started.
So, how is it possible that the licence was not awarded? Is the regulator to blame for a change of mind, or did the companies and institutes behind the project move too fast? There is a case to make for both.
If the most recent reservoir modelling work performed by Gas Storage Denmark had not changed any of its inferences with regards to CO2 migration towards the gas storage site, it is possible that the authorities ultimately took a more stringent stance than what the stakeholders might have expected. There is a comment on LI that suggests something along these lines.
At the same time, it could also be that further study by the future operators changed the scenarios. In the article we published last year, the authors state that new seismic had been acquired that should shed more light on the Gassum Fm reservoir in the NE flank, because existing 3D data only partly covered the area of interest. If that is the case, it is odd that the project seemed moving ahead even without the latest data being available to confirm that the NE flank was indeed the best candidate.
In conclusion, it is difficult to point a finger to the party most responsible for this change of plan. But the question can nevertheless be asked, how serious is Denmark about getting CO2 into the ground? This project was clearly the most advanced in the country, and even though three new exploration licences have now been awarded, it nevertheless feels like back to square one.
