Government of Alberta: Alberta moves to forefront in carbon capture and storage

Edmonton, Oct 09, 2009 (M2 PRESSWIRE via COMTEX) -- SCUAF | Quote | Chart | News | PowerRating -- The Alberta government has moved onto the global stage with the signing of a Letter of Intent with Shell Canada to implement large-scale Carbon Capture and Storage (CCS) technology.

'I am extremely pleased we are on the cusp of getting steel-in-the-ground projects up and running. Not only will they help reduce greenhouse gas emissions, this project will provide us with information about the technology that will help lower costs over time,' said Energy Minister Mel Knight.

The province has signed a Letter of Intent with Shell Canada Energy, on behalf of the Athabasca Oil Sands Project: a joint venture among Shell Canada - 60 per cent, Chevron Canada Limited - 20 per cent and Marathon Oil Sands L.P. - 20 per cent to provide $745 million in funding for its Quest project over the next 15 years.

'The Government of Alberta and Government of Canada should be commended for their leadership and vision on advancing deployment of CCS,' said Graham Boj', VP, HSSE & Sustainable Development, Shell Canada. 'Finding ways to reduce greenhouse gas (GHG) emissions is one of the most important challenges facing society, and developing substantial CCS capability with governments and key stakeholders is one of our greatest priorities.'

The Government of Canada is also contributing $120 million toward this project through the Clean Energy Fund to help demonstrate CCS technology and advance Canada's leadership on clean energy technologies while reducing greenhouse gas emissions from energy production.

'The most viable emission-reducing technology for fossil fuels is carbon capture and storage,' said the Honourable Lisa Raitt, Minister of Natural Resources. 'The Government of Canada is delivering results by supporting new, clean technology innovation, positioning Canada as a leader in this technology development and resulting in significant benefits for our environment.'

The Alberta government is still pursuing Letters of Intent with project proponents for the remaining available funding.

This CCS project supports the Provincial Energy Strategy to enhance clean energy production through energy technology leadership. Once all of the projects supported through Alberta's CCS funding are fully developed, they are expected to reduce greenhouse gas (GHG) emissions between four and five million tonnes per year beginning in 2015.

Carbon Capture and Storage (CCS) project details

Shell Canada Energy/ Chevron Canada Ltd./ Marathon Oil Sands L.P. - Quest project

The Quest project in Alberta's Industrial Heartland near Fort Saskatchewan will capture and store up to 1.2 million tonnes of CO2 per year from the Scotford Upgrader and from the Scotford Upgrader Expansion. The CO2 will be captured from the steam methane units, which produce hydrogen for upgrading oil sands hydrocarbon known as bitumen.

The CO2 will be injected 2,300 metres below the earth's surface underneath cap rock. Two injection wells are in the test phase until early 2010. The total cost of the project is projected to be $1.35 billion.

CCS project funding details

The Alberta government has committed $2 billion to advance CCS technology. Projects will be eligible to receive up to a maximum of 75 per cent of the total incremental cost to capture, transport and store CO2. A maximum of up to 40 per cent of the approved funding will be distributed during the design and construction stage based on achieved milestones and up to an additional 20 per cent of the approved funding will be granted upon commercial operation. The remaining 40 per cent of the funding will be paid as CO2 is captured and stored over a maximum period of 10 years.

A total of $100 million has been budgeted this fiscal year for engineering and design work. No funds will be dispersed until the companies enter into a funding agreement.

CONTACT: Jerry Bellikka, Energy Communications, Government of Alberta Tel: +1 780 422 3667 Tel: +1 780 310 0000

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