Leading international law firm Herbert Smith Freehills has advised long-standing clients bp, Equinor and TotalEnergies on the closing of the project financings for the Northern Endurance Partnership Project (the NEP Project) and the Net Zero Teesside Project (the NZT Power Project), including on the bankability aspects of the business models and commercial contracts, as well as the financing structure and debt documentation.

The NEP Project comprises an onshore and offshore pipeline transportation and geological CO2 storage facility that will receive and store CO2 from emitters who are thereby able to decarbonise their operations. It is the first of two “track 1” CO2 transportation and storage projects in the UK and as such is the first project to be developed under the UK’s new Carbon Capture, Utilisation and Storage (CCUS) business model. bp, Equinor and TotalEnergies are NEP shareholders.

The NZT Power Project, developed by a consortium comprising bp and Equinor, will consist of a 742MW combined-cycle gas turbine (CCGT) equipped with amine-based post-combustion carbon capture to provide dispatchable low-carbon power, located in Teesside, UK. It aims to be the first CO₂-abated CCGT power plant in the UK, thereby providing a crucial source of low-carbon baseload power generation as part of the energy transition.

Start-up on the projects is expected in 2028, supporting the UK Government’s Clean Power 2030 ambition.

The Herbert Smith Freehills team was led by partners Matthew Job and Tom Marshall, supported by of counsel Rowena van de Grampel on the NEP Project and partner Heather Culshaw on the NZT Power Project. The core finance and corporate teams included: senior associates Artem Soloshchenkov, Sam Cundall, Ania Sharp, Amanda Tsangalis, Eliza Eaton, and Kate Laidlow-Singh, and associates Rohy Alsaad, Abraham Whitworth, William Beynon, Thomas Eldred, Alagammai Murugappan, Eni Owolabi, Matt Berlansky, Michael Edwards, Brody Brooke, and Chloe Njamfa.

The wider team included: bp relationship partner for Finance William Breeze, partners Nick May, John Chetwood, Stephen Rayfield, William Turnbull, Kathryn Coveney, Catherine Howard, Tim Healey, Nusrat Zar, Morris Schonberg and Will Arrenberg, and consultant Tim Briggs, from a range of practices, including Corporate, Finance, Real Estate, Planning, Construction, Disputes, Tax and Digital Legal Delivery, across our London, Paris and Belfast offices.

Partner Matthew Job commented: “The project financings for the NEP Project and the NZT Power Project mark a key milestone in the development of carbon capture facilities in the UK – they have, quite literally, established a new industry in the UK that is centred around a new regulated utility type business model for the transportation and storage of CO₂. We are immensely proud to have advised on the financings for these projects, which will be a cornerstone of the UK’s decarbonisation strategy.  Alongside other initiatives in offshore wind, new nuclear and hydrogen production, these projects place the UK (and with it Herbert Smith Freehills) at the forefront of substantive and credible, “in delivery” energy transition.”

Partner Tom Marshall commented: “Our selection as legal counsel to bp for the projects is a real testament to the wealth of attributes across multiple practice areas and offices that we bring to energy transition transactions. Alongside other roles, including as project counsel on the track 2 Viking CCUS project, as lender counsel on the Sizewell C new nuclear project and continuing to advise Tideway on its regulatory model and financing, Herbert Smith Freehills has first-rate credentials in relation to large greenfield projects developed within regulated asset and similar business models.”

The firm has extensive experience advising on other decarbonisation projects, including our advice on the financing of Statera’s 300MW Battery Energy Storage System (BESS) project and its subsequent flexible generation project in Thurrock, England, and our advice to Renewable Power Capital on the financings of its 553MW onshore wind portfolio in Sweden and the refinancing package of its 146MW Klevberget onshore wind farm in Sweden.

The firm has also advised on a number of projects that adapt the RAB model to the development of greenfield infrastructure, including our advice to Thames Tideway on its limited recourse/whole business financing arrangements which is backed by its RAB revenue structure and Government support package, acting as lender counsel on the Sizewell C new nuclear project and as project counsel to the Viking CCUS project.