Alberta's largest oil sands producers have struck a trilateral memorandum of understanding (MoU) with the provincial and federal governments to advance a major carbon capture project and potentially end years of negotiations.
The Oil Sands Alliance is moving forward with the Pathways project in northeast Alberta that will capture 6mn metric tonnes/yr by January 2035. The group is comprised of Canadian Natural Resources, Cenovus, Suncor, Imperial Oil and ConocoPhillips Canada. Together they represent about 95pc of Canada's oil sands production.
The first phase of the proposed Pathways initiative would divert carbon dioxide (CO2) from 13 oil sands facilities in the Fort McMurray, Christina Lake and Cold Lake regions of the province to an underground storage hub in the Cold Lake area. More than 650km (400 miles) of pipeline would be required and the Oil Sands Alliance must make best efforts to procure it from Canadian suppliers.
Another 10mn metric tonnes/yr of emissions reductions would be achieved through future Pathways expansions, with half of that increase coming by 2040 and the balance by 2045.
A cost estimate was not provided by the Oil Sands Alliance, but Cenovus chief executive Jon McKenzie estimated in June that it could be as much as C$30bn ($21bn).
Canada is offering investment tax credits for capital expenditures related to carbon capture, utilization and storage, and is planning to legislate investment tax credits for enhanced oil recovery related carbon capture.
Definitive agreements between the oil sands members and the two levels of government are expected by 15 November this year.
Broadly, the trilateral agreement lays out a shared goal of expanding market access, increasing oil production, reducing emissions and engaging with indigenous groups.
As such, Pathways is tied to the proposed 1mn b/d oil pipeline to greater Vancouver, British Columbia, that was announced earlier this month and was referred to the federal Major Projects Office for potential fast-tracking. The planned West Coast Oil Pipeline (WCOP) will follow a similar route as the Trans Mountain system and is led by Canada and Alberta, with Pembina Pipeline owning a 10pc stake.
WCOP is estimated to cost as much as C$44bn.
