Oslo embarks on carbon capture plan after $1.1bn Fortum exit

The sign of Finnish energy company Fortum is seen at its headquarters in Espoo, Finland July 17, 2018. Picture taken July 17, 2018. REUTERS/Ints Kalnins/

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  • Fortum sells stake in Oslo heating business
  • The buyers are Hafslund Eco from Oslo and two investment companies
  • The municipality will help finance the CCS project
  • CCS investment estimated at NOK 9 billion

OSLO, March 22 (Reuters) – Norway’s capital pledged on Tuesday to breathe new life into a long-delayed carbon capture project after the city authority reached a deal to buy out the stake of Finnish utility Fortum ( FORTUM.HE) in one of the city’s main heating networks. suppliers.

Fortum said earlier that it had agreed to sell its 50% stake in Fortum Oslo Varme for 10 billion Norwegian kroner ($1.1 billion) to Hafslund Eco, owned by the Oslo municipality, as well as to private equity firm HitecVision and Sweden’s Infranode.

Fortum Oslo Varme, Norway’s largest producer of district heating, uses excess energy from a waste incineration plant to heat water, pumping it to homes and businesses through a network of insulated pipes.

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Oslo has planned for years to develop technology for the waste plant as part of Norway’s carbon capture and storage (CCS) project Longship, which aims to transport CO2 from onshore industry to a vast underground deposit. offshore.

In 2017, the city said the Klemetsrud incinerator had shown promising results in capturing greenhouse gases from fumes from burning waste, but plans to complete the project by 2022 fell through due to of a lack of funds.

The Norwegian government has pledged some 3 billion crowns in funding and Oslo and its trading partners are ready to pay up to 6 billion out of an estimated cost of 9 billion, with a goal of completion in 2026, the ruling mayor has said Raymond Johansen.

The waste incinerator emits approximately 400,000 tonnes of CO2 per year, which corresponds to 14% of the city’s overall greenhouse gas emissions.

“We can’t go on with this. If we want to stop climate change, we have to change the way we do things and we have to act before it’s too late,” Johansen told a news conference. .

Closing of the sale of Fortum’s stake is subject to approvals from Oslo City Council as well as competition regulators, and is expected to occur in the second quarter of 2022, the companies said.

($1 = 8.7541 Norwegian kroner)

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Reporting by Nora Buli Writing by Terje Solsvik Editing by Kirsten Donovan and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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