Shell fits final module on Alberta oil sands' first carbon capture project

Avante

27/08/2014 20:01

By Nia Williams 
    CALGARY, Alberta, Aug 27 (Reuters) - Shell Canada  RDSa.L  
has fitted the final module at the first  carbon capture and 
storage project in Alberta's oil sands, the company said on 
Wednesday, putting start-up on track for 2015. 
    The Quest CCS project, now 70 percent complete, is being 
built with funding from the Alberta and Canadian federal 
government to help mitigate greenhouse gas emissions from the 
oil sands. 
    It will capture more than 1 million tonnes of carbon dioxide 
each year from Shell's Scotford upgrader north of Edmonton and 
inject it 2 km under the Alberta prairies into impermeable 
layers of rock for permanent storage. 
    The upgrader converts mined bitumen from Shell's Athabasca 
oil sands project, a joint venture with Chevron Corp  CVX.N  and 
Marathon Petroleum Corp  MPC.N , into refinery-ready crude. The 
CCS project will capture 35 percent of direct emissions from the 
Scotford facility. 
    Extracting and processing raw bitumen requires vast amounts 
of fossil fuels to be burned, making oil sands crude around 17 
percent more "greenhouse gas intensive" than average oil used in 
the United States, a State Department report said last year. 
    Oil sands producers have come under heavy pressure from 
environmentalists to reduce the carbon footprint of their 
projects and environmental concerns are one of the chief reasons 
for a six-year delay in getting U.S. presidential approval for 
the Keystone XL pipeline. 
    Shell Canada president Lorraine Mitchelmore said the CCS 
project would be cost neutral for the company and there was a 
potential future market for carbon, although Shell was not 
looking at that right now. 
    "It's very early stage technology. We are thinking about 
what's happening in the future and where could policy evolve to. 
We are in the risk management business, that's how we look at 
long term projects," Mitchelmore said. 
    Shell declined to give a cost estimate for Quest but in 2009 
the government provided an estimate of $1.35 billion and the 
project is on budget. 
    Of that $865 million is funding from the federal and 
provincial governments on the understanding Shell will share 
knowledge to bring down costs on any future CCS projects. 
 
 (Editing by Cynthia Osterman) 
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters 
Messaging: nia.williams.thomsonreuters.com@reuters.net)) 
 
Keywords: CANADA SHELL/CARBONCAPTURE