We desperately need O&G companies to honor the Paris Agreement. Here’s how.

Perhaps more than ever before, the hot, dry summers of the past few years have brought a heightened awareness of climate and carbon efficiency into the public consciousness. However, the need for major technology changes and the ways in which we source, handle and use energy has long been on the agenda of Norwegian energy company Equinor, formerly Statoil, whose corporate strategy can be summarized as always safe, high-value and low-carbon.

Well aware of the challenge, Equinor is working on a number of projects to cut carbon emissions and play its part in honoring the Paris Agreement. In spring of 2017, the company introduced a new climate road map with ambitious 2030 targets to make all of its operations more carbon-efficient and sustainable. Among them are:

• Reducing CO2 emissions per oil barrel produced by 20 percent from 2017 levels of 10 kilograms to 8 kilograms
• Aiming to achieve annual CO2 emission reductions of 3 million tonnes
• Investing 15–20 percent of annual capital expenditure in new energy solutions

“We are reducing our own emissions and building a high-value, low-carbon portfolio,” explains Bjørn Otto Sverdrup, Senior Vice President for Sustainability at Equinor. “The CO2 emissions from Equinor’s oil and gas production already were at a low level compared to the industry average of 17 kilograms. But today we have reached 9 kilograms, and have lowered the carbon emissions by 10 percent per barrel of oil during 2017 alone.”

While the road map serves to strengthen Equinor’s industry leadership in climate performance, it’s not a solitary endeavor, stresses Sverdrup: “The climate struggle is an international one, which is why Equinor continues to seek collaboration with other companies, partners, suppliers, vendors. We are all part of the same journey. How can we improve, how can we do things smarter?”

One of the promising examples in Equinor’s low-carbon strategy is the electrification of offshore oil and gas installations in the Norwegian Continental Shelf (NCS). And one of the partners on this journey that shares the vision of finding smarter, more efficient and sustainable solutions is Siemens Energy. Together with Equinor, the company is striving to find cost-efficient power-from-shore solutions that achieve a longer reach and are more robust in case of grid voltage fluctuations.

Traditionally, oil platforms have been powered by mid-size gas turbines. With wellhead or process gas already present on-site, it seems like the natural solution. But their fuel efficiency is comparatively lower than modern power plants, which could make more efficient use of the fuel with lower emissions. Carbon emissions from these gas turbines in the NCS add up to 80 percent of Equinor’s entire carbon emissions. This situation was the reason behind the idea to give oil and gas platforms access to zero-emission onshore electricity. 

In total, Equinor is on track to save 1.2 million tonnes of CO2 emissions from the NCS during 2018. This is almost three years ahead of the 2020 target. Now all eyes are on the ambitious 2030 road map. In the oil and gas industry, the company has thus reinforced its position as trailblazer for climate efficiency. And championing the Paris Agreement hasn’t harmed its business prospects – quite the contrary, says Bjørn Otto Sverdrup: “Keep in mind, good climate solutions are also very good business solutions.”

In its broad approach to become a sustainable energy company, it is vital for Equinor to look at every single detail of its complex operations. Its product range and production efficiency need to be aligned with its main targets and visions. The electrification of the oil and gas platforms is one massive step into a more sustainable future and is part of the ongoing task of further improving climate efficiency in the oil and gas industry. The partnership between Equinor and Siemens Energy can be one of the enablers of this crucial endeavor.

In Norway, about 99 percent of electricity is renewable – either hydro or wind energy. Electrification would thus constitute a significant cut in NCS carbon emissions. “Equinor’s ambition for electrification of own-operated NCS fields has an identified potential to cut carbon emissions by more than 1.3 million tonnes annually. This is equivalent to the emissions from 650,000 cars,” says Elisabeth Kvalheim, Equinor’s Chief Technology Officer.

So far, Equinor is already on track to achieve its targeted emission reduction by electrifying oil and gas fields such as:

• Johan Sverdrup, where Siemens Energy will be supplying the HVDC equipment for Phase 2 – a contribution that will amount to reducing the equivalent emissions from 130,000 cars, and
• Martin Linge, where Siemens Energy provided the world’s longest HVAC stepout.

For these projects, HVDC and HVAC grid access technology is being used that has been proven in offshore applications such as connecting wind farms and converter stations with the mainland grid. 

The company is now working with technology partner Siemens Energy to develop even more cost-efficient technology for enabling power-from-shore solutions in future applications. “The technology cooperation with Siemens,” says Kvalheim, “is among the best we have,” and the technology agreement between the two partners has recently been renewed for another three years.

“We believe in the power of collaboration, and that we can achieve more through working together with others,” explains Kvalheim. “In order to capture even more value from cross-discipline solutions we aim to strengthen our collaboration with suppliers, such as Siemens Energy. We both focus on low-cost, low-carbon solutions and reusing standardized technologies to reduce the carbon footprint of offshore oil and gas production.” In this partnership, she says, Siemens Energy’s strong environmental portfolio and digital competence are of particular importance – as are its efforts to also increase gas turbine and compressor efficiency. “Our technology strategy leverages the advances in digitalization, high- and medium-voltage transmission technology and turbine technology. In our transition to a low-carbon company, all these levers are important.” 

August, 2018 (first publication), September 2022 (updated publication)

Nils Lindstrand is a business journalist based in Stockholm.

Picture credits: Ole Jorgen Bratland, Jan Arne Wold, Equinor, Siemens energy