LONDON (Reuters) - BP (LON:BP) and Orsted have resolved a dispute over an overlapping zone in the UK North Sea between the BP-led Endurance carbon capture project and the Danish firm's planned Hornsea 4 windfarm, the companies said in a letter published by UK authorities.
Britain granted preliminary licences for both proposed projects more than a decade ago, when an overlap of about 110 sq km on the sea floor was not seen as posing an insurmountable obstacle to either technology.
At the heart of the issue is the risk of boats used to monitor carbon leaks colliding with wind turbines fixed to the sea floor.
In previous documents, BP said it was unwilling to switch to a costlier boat-free monitoring system and Orsted said it was unwilling to cede territory, with both saying such concessions would hit their commercial prospects.
"Orsted and BP confirm that a commercial agreement has been reached," Orsted and BP said in a letter published on Monday on the British government infrastructure planning permit website for Hornsea 4.
"BP has no remaining objection to the Hornsea Four ... application and agrees to withdraw any and all prior representations made in relation to the Hornsea 4."
They did not elaborate on details of the "commercial" agreement.
BP was pleased to have reached a positive outcome, a spokesperson said.
An Orsted spokesperson said: "We have worked constructively with BP, the Crown Estate and other stakeholders for over two years to find a pragmatic solution that will secure the future of both projects."
"Now that an agreement has been reached, we await the determination from the secretary of state on planning consent which is expected on July 12."
Endurance's capacity alone could account for at least half of the 20 million to 30 million metric tons of CO2 Britain aims to capture a year by 2030.
The windfarm's planned capacity of 2.6 gigawatts (GW) would help Britain move towards its goal of increasing offshore wind capacity from 11 GW in 2021 to 50 GW by 2030.
"It remains clear that a long-term solution to co-location needs to be found in order to safeguard future offshore projects ... If we are to meet the UKs ambitions for 2030 and beyond, it's vital that offshore wind projects are deployed sensitively, sustainably and without delay," the Orsted spokesperson said.