Contractors announced for £4bn Teesside power scheme

Illustration of the NZT Power development

Contractors for a £4bn energy scheme on Teesside have been named. 

Net Zero Teesside Power (NZT Power) and the Northern Endurance Partnership (NEP) have selected contractors for engineering, procurement and construction contracts with a combined value of around £4bn. 

NZT Power aims to be one of the world’s first commercial scale gas-fired power stations with carbon capture.

NEP is to build the CO2 transportation and storage infrastructure to serve East Coast Cluster carbon capture projects.

Final contract awards will be subject to receipt of regulatory clearances and final investment decisions (FID) being taken in September 2024 or earlier.

First commercial operations are expected from 2027. 

The selection of nine leading specialist contractors across eight contract packages is a major milestone for the Teesside-based projects, which would contribute to the UK’s journey towards net zero emissions by 2050. 

The contractors are:  

  • Onshore power, capture and compression - Technip Energies and GE Vernova consortium including Balfour Beatty as the construction partner and Shell as the technology licensor.
  • Onshore CO2 gathering system and gas connection – Costain.
  • Linepipe, onshore and offshore - Marubeni-Itochu Tubulars Europe Plc with Liberty Steel Hartlepool, Corinth Pipeworks and Eisenbau Kramer GmbH as the nominated pipe-mills.
  • Offshore pipeline, landfalls, onshore outlet facilities and water outfall – Saipem.
  • Offshore subsea injection system – TechnipFMC.
  • Power and communications cable - Alcatel Submarine Networks.
  • Offshore systems engineering- Genesis.
  • Integrated project management team – Wood.

The selected contractors will continue working with the local and regional supply chain, with further engagement taking place over the coming weeks and months. 

NZT Power, a joint venture between bp and Equinor, could generate up to 860 megawatts of power - equivalent to the average electricity requirements of around 1.3 million UK homes. 

Up to two million tonnes of CO2 per year would be captured at the plant, and then transported and securely stored by the NEP in subsea storage sites beneath the North Sea. 

NZT Power could create and support more than 3,000 construction jobs and then require around 1,000 jobs annually during operations until 2050.

NEP, a joint venture between bp, Equinor, and TotalEnergies, is the CO2 transportation and storage provider for the East Coast Cluster (ECC). 

The Teesside onshore NEP infrastructure would serve the Teesside-based carbon capture projects – NZT Power, H2Teesside and Teesside Hydrogen CO2 Capture – that were selected for first connection to the ECC by DESNZ in March 2023 as part of the UK’s cluster sequencing process for carbon capture usage and storage (CCUS). 

It is anticipated that around four million tonnes of CO2 per year from these projects would be transported and stored from 2027.

Ian Hunter, managing director, Net Zero Teesside Power, said: “The selection of contractors is a major step forward for Net Zero Teesside Power. 

“We have selected world-class partners who have the experience and capability needed to deliver. We aim to take final investment decision in September 2024 or before, after which we’d look forward to working with our EPC partners through the construction phase”. 

Chris Daykin, general manager, Northern Endurance Partnership, added: “The selection of contractors is a clear signal of momentum within the East Coast Cluster. 

“The Northern Endurance Partnership’s CO2 pipelines are essential to connect carbon intensive projects to offshore storage and would play an important role in helping the region pursue its net zero plan”.

In partnership with Technip Energies and GE Vernova, Balfour Beatty will construct a combined-cycle plant, integrated with a carbon capture plant using Technip Energies’ Canopy by T.EN (TM) solution powered by the Shell CANSOLV CO2 capture technology.

Balfour Beatty will use modular construction techniques to build the mechanical and electrical equipment and plant rooms off-site, in a controlled factory setting.

Leo Quinn, Balfour Beatty group chief executive, said: “Today’s announcement takes us a step closer to realising one of the world’s first commercial scale gas-fired power stations with carbon capture. It’s a significant milestone in delivering the critical infrastructure needed to transition the UK to net zero.

“Balfour Beatty’s market leading capabilities, underpinned by our unrivalled experience and proven track record in delivering complex infrastructure projects, means we are perfectly positioned to support the delivery of this critical project alongside Technip Energies and GE Vernova – proving on the world-stage that the UK is primed and ready to lead the way in decarbonising our industrial footprint.”

Ben Houchen, Tees Valley Mayor, said the development would be “the single biggest investment in Teesside since ICI”.

He added: “It cannot be understated the transformational economic impact this will have right across Teesside, Darlington and Hartlepool. 

“Our area is now the world-leading centre in developing the clean, green industries of the future, which most importantly will deliver the highly skilled well-paid jobs of the future.”

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