Oil sands producers plan CCS network, hub

  • : Crude oil, Electricity, Emissions, Hydrogen, Pipe and tube
  • 24/03/25

A group of Canadian oil sands companies are planning to build a massive C$16.5bn ($12.2bn) carbon capture and storage (CCS) project to decarbonize operations.

Canadian Natural Resources (CNRL), on behalf of the Pathways Alliance consortium, filed plans for the project with the Alberta Energy Regulator (AER) last week to store 10mn-12mn t/yr of carbon dioxide (CO2) equivalent in the oil sands region of northeast Alberta.

The Pathways Alliance also includes Cenovus, Suncor, Imperial Oil, ConocoPhillips Canada and MEG Energy, which account for about 95pc of the province's roughly 3.3mn b/d of oil sands production.

Construction of the project is expected to begin as early as the fourth quarter 2025 with operations starting in 2029 or 2030.

The main CO2 transportation pipeline will be 24-36-inches in diameter and stretch about 400km (249 miles). It will initially tap into 13 oil sands facilities from north of Fort McMurray to the Cold Lake region, where the CO2 will be stored underground.

"When you have that concentration of emission sources, technologies like carbon capture and storage become very, very technically viable," Pathways Alliance president Kendall Dilling told the CERAWeek by S&P Global conference in Houston, Texas, earlier this month.

Oil sands crude producers have been criticized for being particularly carbon intensive. The Pathways Alliance is their answer to driving operations to net zero by 2050. The CCS project and "a host of other technologies" represent Phase 1 of the Pathways Alliance's efforts and will reduce oil sands emissions by about 25pc by 2030, according to Dilling. The CCS project itself accounts for about half of this reduction.

Phase 2 is planned for between 2031 to 2040 and would tie in at least another eight oil sands projects, while also ramping up alternative energy initiatives related to hydrogen, electrification and small modular nuclear reactors.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/05/13

Chevron books Aframax for TMX cargo to California

Chevron books Aframax for TMX cargo to California

Houston, 13 May (Argus) — Chevron provisionally hired an Aframax to haul a cargo of crude from Vancouver, British Columbia, to the US west coast as the Trans Mountain Expansion (TMX) brings more oil to Canada's Pacific coast. Chevron put the Aframax Garibaldi Spirit on subjects for a Vancouver-US west coast voyage loading from 25 May at WS125, market participants said. That rate is equivalent to $11.16/t or $1.63/bl for heavy sour Cold Lake, according to Argus data. The US west coast historically has been the main destination for crude exported from Vancouver, with 96pc, or about 38,500 b/d, landing at ports in Washington and California in the 12 months ended 30 April, according to data from analytics firm Vortexa. Chevron purchased five cargoes from Vancouver for its 269,000 b/d refinery in El Segundo, California, during that span, most recently in February. The 590,000 b/d TMX project began commercial service on 1 May, tripling the capacity of the Trans Mountain pipeline system to 890,000 b/d. The line creates a larger link from Alberta's growing oil sands production to the west coast port of Vancouver and direct access to Pacific Rim markets, where buyers are eager for heavy sour crude . The first TMX cargo, 550,000 bl of Canadian Access Western Blend which Suncor booked on an Aframax in late April , will load between 18-24 May for June delivery in China. PetroChina and Unipec each control an Aframax near Canada's Pacific coast that would be available to load in Vancouver in the second half of May, though those ships could also be relet to deliver crude to the US west coast. The port of Vancouver's distance from many traditional Aframax trading routes may stretch the global fleet once TMX ramps up. The port cannot accommodate tankers larger than Aframaxes. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

FTC flexes muscles over US oil mergers


24/05/13
24/05/13

FTC flexes muscles over US oil mergers

New York, 13 May (Argus) — US antitrust regulator the Federal Trade Commission's insistence that the former chief executive of independent Pioneer Natural Resources, Scott Sheffield, be barred from ExxonMobil's board as a condition of approving their $64.5bn merger serves as a cautionary tale for other pending deals. The FTC alleged that Sheffield, a long-time industry leader who made Pioneer one of the biggest producers in the Permian, sought to collude with Opec. It cited hundreds of text messages in which he discussed pricing and output with officials from the oil cartel, as well as efforts to co-ordinate with other Texas producers. The fallout for other transactions still going through the approvals process may be limited, given the specific nature of the allegations against Sheffield, but the FTC's action shows the agency will not hesitate to demand concessions in order to wave deals through. Given heightened political sensitivities to fuel prices in an election year, that should put the industry on notice. At the very least, future reviews are likely to include requests to turn over any records — electronic or otherwise — that involve discussions with competitors or other oil-producing jurisdictions, according to former FTC chairman Bill Kovacic. "It's a reminder that conversations with your competitors about production levels and pricing levels are exceedingly unwise," Kovacic says. It was significant that the FTC did not tamper with the basic fundamentals of the Pioneer acquisition. "I suspect the former CEO is unhappy about being placed on the sidelines," he says. But it is also a "relatively inexpensive price to pay for getting this done". Under the leadership of Lina Khan, the FTC has taken a tougher line when it comes to mergers, and second requests for information have become the norm when it comes to oil deals. Chevron's planned $53bn acquisition of US independent Hess has been held up by such a request, even as a dispute over the target company's stake in a giant offshore find in Guyana has cast a cloud over the transaction. Diamondback Energy's announced $26bn takeover of Endeavor Energy Resources was also subject to a second request. Occidental Petroleum chief executive Vicki Hollub told analysts in February that "some of our teams felt like [the FTC] asked for everything" when going through the approval process for the company's $12bn purchase of CrownRock. But Occidental said this week that its teams are working "constructively" with the regulator, and that the deal is expected to close in the third quarter. Consolidation over consumers? The rapid pace of consolidation in the US oil and gas sector since late last year has led to mounting calls for increased scrutiny on antitrust grounds. "Let's not kid ourselves, these mergers aren't just about efficiency or lowering costs," US Senate Democratic majority leader Chuck Schumer wrote in a letter signed by 50 Senate and House Democrats in March. They are about "buying out the competition so the newly consolidated industry can boost profits at the expense of consumers". Given long-serving company executives' preference to stick around after selling their firms, the FTC's action in relation to Pioneer could theoretically dissuade other ‘big-name' founders from going down the same road, consultancy Rystad senior analyst Matthew Bernstein says. On the other hand, the loss of control for family-owned operators has already served as a big enough obstacle for some companies that would otherwise be seen as takeover targets. As for Sheffield, Pioneer has said the FTC's complaint reflects a "fundamental misunderstanding" of US and global oil markets and "misreads the nature and intent" of his actions. Pioneer more than doubled its daily production between 2019 and 2023, playing its part in adding to domestic energy supply, the firm said. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s Idemitsu invests in US e-methanol producer HIF


24/05/13
24/05/13

Japan’s Idemitsu invests in US e-methanol producer HIF

Osaka, 13 May (Argus) — Japanese refiner Idemitsu is investing in US synthetic fuel (e-fuel) producer HIF Global to develop a supply chain of e-methanol, as part of a strategy to achieve net zero emissions by 2050. Idemitsu said on 13 May that it has agreed to spend $114mn to secure an undisclosed stake in HIF after the US firm issued new shares. HIF is expected to produce around 4mn t/yr of e-methanol equivalent by 2030 at its production sites in Australia, North America and South America. E-methanol is typically made from green hydrogen and carbon dioxide (CO2). This is used as an alternative bunker fuel and as a feedstock for synthetic fuels, including gasoline, sustainable aviation fuel (SAF) and diesel, as well as synthetic chemicals. Idemitsu is focusing on e-methanol, along with blue ammonia and SAF, as its investment targets to achieve net zero by 2050. The company aims to set up 500,000 t/yr of e-methanol supplies in domestic and overseas markets in 2035 by using its existing oil supply and sales networks. The target includes unspecified volumes from HIF, possible production in the Middle East and domestic output, Idemitsu said. The deal follows Idemitsu's initial agreement with HIF in March 2023 to work on production and promotion of e-fuels, along with a decision to buy e-methanol from HIF and jointly study the possible development of the fuel. Idemitsu also agreed an initial deal with HIF and Japanese shipping firm Mitsui OSK Line to explore opportunities to develop an e-fuel and e-methanol supply chain between Japan and where HIF's e-fuel and e-methanol production plants are located, including CO2 transportation from Japan to HIF's production sites. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

China, US pledge joint methane action at climate talks


24/05/13
24/05/13

China, US pledge joint methane action at climate talks

San Francisco, 13 May (Argus) — The US and China have pledged to further co-operate on methane reduction, among other topics, following a first meeting between the countries' new climate envoys in Washington during 8-9 May. The meeting follows video conferencing between the two sides in January under their "working group on enhancing climate action in the 2020s" initiative. China and the US reaffirmed their 2021 agreement to co-operate on reducing carbon emissions in the power generation sector, cutting methane emissions and boosting renewable energy in the " Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis " last November in San Francisco. China confirmed the appointment of Liu Zhenmin to replace Xie Zhenhua as the country's climate advsior in January. Liu's US counterpart John Podesta replaced John Kerry in January. Liu and Podesta discussed co-operation "on multilateral issues related to promoting a successful COP 29 in Baku, Azerbaijan" at the latest talks, the US state department said on 10 May. They also discussed issues identified in the Sunnylands statement, including energy transition, methane and other non-CO2 greenhouse gases, the circular economy and resource efficiency, deforestation,as well as low-carbon and sustainable provinces, states and cities. They plan to co-host a second event on reducing methane and other non-CO2 greenhouse gases in Baku and "conduct capacity building on deploying abatement technologies". It remains to be seen how the two new climate advisors will bring the two countries closer in climate negotiations. The Sunnylands statement and the close relationship of their predecessors were instrumental in bringing consensus at last year's Cop 28 UN climate summit in Dubai. China released a much anticipated methane plan last November, although Xie has flagged challenges with data monitoring in the sector. But China and the US have agreed to develop and improve monitoring to "achieve significant methane emissions control and reductions in the 2020s". China has also not signed on to the Global Methane Pledge to cut methane emissions by 30pc by 2030, from 2020 levels. The country's emissions may also rise more than expected after it redefined its meaning of energy intensity, according to the Helsinki-based Centre for Research on Energy and Clean Air. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California refineries required to report turnarounds


24/05/10
24/05/10

California refineries required to report turnarounds

Houston, 10 May (Argus) — Refiners in California starting in June must file maintenance schedules with the state's energy commission at least 120 days in advance of planned work, and diagnostic reports within two days of unplanned shutdowns. The new reporting requirements, part of the SB X1-2 bill passed in March 2023, take effect following an 8 May meeting of the California Energy Commission (CEC) where the measures were finalized. The CEC will now be able to gather a broad range of data from refiners and set a maximum gross gasoline refining margin in an effort to avoid price spikes at the pump. If companies identify a need for maintenance less than 120 days before the planned work, a report to the CEC is required within two business days of the discovery, according to the reporting form posted in the SB X1-2 docket. The reporting form includes space for a description of the work, unit level details and information on the expected effect of a turnaround on transportation fuel inventories at the refinery. The same information will be required for unplanned maintenance, with a report to be sent to the CEC within two business days of the initial outage or lowered rates, and within two business days of the completion of work or return to normal throughputs. The additional information will aide the CEC in analyzing refiner margins and determine whether a margin cap and subsequent penalties are warranted, according to the commission. Industry groups think many of the reporting requirements are burdensome and politically motivated , often requesting information unnecessary to determine margins. Marine import reporting on horizon At the same 8 May business meeting, the CEC moved closer to finalizing a requirement for importers of foreign and domestic refined products and renewable fuels to report shipments at least four days before delivery. The reporting form includes information on vessel routes, costs and products shipped. The CEC approved for the marine reporting requirements to be submitted to the state's Office of Administrative Law for a 10-day review before a targeted 20 May start date. By tracking import data, the CEC aims to build a more accurate picture of what drives retail fuel prices and refiner margins in the state. "In many cases these forms request information that has questionable or no relevance at all to the CEC's efforts to minimize or prevent price spikes," said Sophie Ellinghouse, general counsel for trade group the Western States Petroleum Association, during public comments on the marine reporting requirements at the 8 May meeting. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more