Canadian Government Supports Shell CCS Project

Shell announced on Friday that it had signed agreements with the Governments of Alberta and Canada to secure $865 million in funding for its Quest Carbon Capture and Storage (CCS) Project. The Quest Project will capture and permanently store deep underground more than one million tons of carbon dioxide per year from Shell’s Scotford Upgrader near Edmonton, Alberta, which processes heavy oil from the Athabasca oil sands.

“Quest would be the first application of CCS technology for an oil sands upgrading operation,” says John Abbott, Shell’s Executive Vice President of Heavy Oil. “Not only would it allow us to significantly reduce the carbon footprint of our oil sands operation here in Alberta, but it will contribute to the global knowledge that will help to get other CCS projects up and running more quickly.”

Shell aims to improve its oil sands environmental performance through carbon dioxide reduction, improved water management and minimal impacts of tailings ponds.

“CCS is recognized as one of the most promising technologies to reduce greenhouse gas emissions from fossil fuels. To realize that potential, government support in this important demonstration phase is essential. We would like to thank both levels of government for their commitment to progress CCS technology by investing in Quest,” Abbott concluded.

The signing of the funding agreement was announced as part of an event marking the earlier start-up of Shell’s 100,000-barrel-per-day expansion of its Athabasca Oil Sands Project (AOSP), bringing total capacity to 255,000 barrels per day. The AOSP includes the Muskeg River Mine, Jackpine Mine and Scotford Upgrader.

Regulatory applications for the Quest Project were submitted in November 2010. The signing of the funding agreements represents another important milestone prior to Shell taking a financial investment decision in 2012, subject to the outcome of the regulatory process and economic feasibility.

With carbon dioxide injection planned for 2015, the Quest Project would join a handful of CCS projects around the world that are injecting at a commercial scale. Shell is working with governments and other experts globally on both political and technical levels to facilitate the development and wide-scale deployment of CCS and is involved in progressing a number of projects around the world, across a wide range of sectors.

The Quest Project is being advanced on behalf of the AOSP, a joint venture among Shell Canada (60 percent) Chevron Canada Limited (20 percent) and Marathon Oil Canada Corporation (20 percent).