Shell Files For Carbon Capture In Alberta Oil Sands
Royal Dutch Shell Plc has applied for a C$1.35 billion ($1.31 billion) carbon capture project to cut emissions from the company's Alberta oil sands processing operation with the aid of government funding, it said on Tuesday.
Shell and its partners hope to build a project that would gather emissions from the Scotford upgrading plant near Edmonton and pipe it into a geological formation more than 2 km (1.2 miles) underground.
Called the Quest Carbon Capture and Storage project, it is being designed to capture 1.1 megatonnes of greenhouse gases a year, the company said.
Shell said it will wait for the regulatory process to be completed before it makes a final go-ahead decision. It has previously said operations could start in 2015.
"Today's submission demonstrates the progress that has been made to advance Quest as we work toward the first application of CCS technology in the oil sands," said John Abbott, Shell's executive vice-president of heavy oil.
The company has a 60 percent stake in the oil sands operation and in the Quest proposal. Its partners are Chevron Corp and Marathon Oil Corp with 20 percent each.
The upgrader and oil sands mine are nearing the end of an expansion project to boost output by 100,000 barrels a day to 255,000 barrels a day.
Shell has said that the project would cut 40 percent of the emissions from the upgrader, which turns bitumen from the oil sands into refinery-ready light crude.
Last year, the Alberta government said it would contribute C$745 million to the initiative and Ottawa pledged C$120 million. The governments said they would spend the money over 15 years.
Alberta is known for its vast oil sands, the largest source of crude outside the Middle East and a major target of investment for the world oil industry.
But producing the tar-like oil is carbon-intensive and environmental groups have launched campaigns to warn of the developments' harm to the fight against global warming.
In response, Alberta set aside C$2 billion to invest in carbon capture and storage technology, which is still in the development stage. The federal government has earmarked C$650 million for CCS projects.