Linklaters advises on the UK’s first carbon capture and storage projects

Linklaters has advised the lenders on the debt financing for the Net Zero Teesside Power (NZT Power) and Northern Endurance Partnership (NEP) projects, located in Teesside, UK, which are the first carbon capture and storage (CCS) projects in the UK. The NEP CCS and NZT Power Projects are part of the East Coast Cluster, a Track 1 industrial CCS clusters selected by the UK Government to advance carbon capture initiatives as part of its net-zero emissions strategy.

The NEP project is designed to significantly reduce carbon emissions from major industrial regions such as Teesside and Humber. Once built, NEP will utilise advanced CCS technology to transport carbon dioxide via a 145km offshore pipeline into subsea injection facilities located approximately 1,000 metres below the North Sea seabed. This initiative not only supports the decarbonisation goals but also anchors a sustainable future for industry by securely storing significant quantities of CO₂.

NZT Power, a 742MW gas-fired power station with CCS, will provide flexible low carbon power into the UK national power grid. Utilising the NEP infrastructure, NZT Power is set to be the world’s first fully integrated gas-fired power and carbon capture project.

The two projects will capture and transport millions of tonnes of CO₂  every year and are expected to support thousands of jobs through their construction and operation.

The Projects are backed by a strong business and risk profile, and the sponsors – bp and Equinor for both Projects, as well as TotalEnergies for NEP – bring with them a wealth of experience in the power sector.

The consortium of Lenders involved highly reputable international commercial banks.

Richard Coar comments:

“We’re very proud to have been able to advise the lenders on this landmark transaction. The NEP CCS and NZT Power projects represent a pivotal milestone and pave the way for all future carbon capture projects in the UK. Once constructed, the NEP CCS and NZT Power projects will help to increase the UK’s clean energy capacity, benefitting end-consumers and helping the UK to reach its climate goals.”

Subir Rajadhyaksha adds:

“The NEP CCS and NZT Power projects are the UK's carbon capture pioneers, marking a significant stride towards achieving a zero-emissions future. By leveraging innovative CCS technologies, these projects will not only reduce emissions but also provide a blueprint for similar initiatives globally. We are really pleased to have helped these projects come to fruition."

The Linklaters’ core team was by led by Energy & Infrastructure partners Richard Coar and Subir Rajadhyaksha, alongside partner Charlotte Morgan, managing associates Imogen Ormerod and Kentaro Okamoto, and associates Trisha Dasgupta, Jared Ovsiowitz, Stella Kiggundu, Bila Bawazier, Tye Bayliss and Paras Marya.

The wider team also comprised of managing associates William Johnston, Rory Bennett, Iyesogie Igiehon, and Sebastian Witte, and associates Justyna Todd-Frankowska, Tiffany Pang, Victoria Costa and Benjamin Harris.

Read more about the projects here, here and here.