World’s largest CO2 pipeline slated for construction in Alberta

A plan to build the backbone of the world’s largest carbon capture project in Alberta was given a major injection of capital by a deal between the provincial government and two Calgary-based companies.

Oil and gas infrastructure

A plan to build the backbone of the world’s largest carbon capture project in Alberta was given a major injection of capital by a deal between the provincial government and two Calgary-based companies.

The Alberta government has signed a letter of intent with Enhance Energy and North West Upgrading to construct a 240-km pipeline system that will transport carbon dioxide (CO2) from sources in the Industrial Heartland near Fort Saskatchewan to mature oil producing fields near Clive, north of Red Deer.

“Enhance is building the main CO2 distribution system for the province of Alberta,” said Ian MacGregor, chairman of Enhance Energy. “This will be the largest CO2 pipeline in the world, when it’s in operation.”

As a result of this deal, the Alberta Carbon Trunk Line (ACTL) has been awarded $495 million over 15 years from the provincial government, as well as $63.3 million from the Government of Canada’s ecoENERGY Technology Initiative and the Clean Energy Fund.

“This project has been in the works for more than four years and our team is excited to have this support which will allow us to bring it to completion,” said Susan Cole, president of Enhance Energy.

The initial supplies of CO2 will come from the fertilizer manufacturer Agrium Inc, in Redwater and the proposed North West Upgrader, which could be under construction as early as this summer.

“Enhance will pay North West Upgrading for CO2 at the gate and then transport it to the oil fields,” said MacGregor. “The pipeline will pick up CO2 from a wide variety of emitters and transport CO2 to a wide variety of sinks. This funding will allow us to build the pipeline larger than we initially planned and go to a lot more places.”

The North West upgrader will upgrade bitumen from Alberta’s oilsands. The captured CO2 will be transported to depleted conventional oilfields and used in enhanced oil recovery (EOR).

EOR is a method of producing oil by injecting CO2, which creates pressure in the reservoir and pushes the oil to the surface more easily.

This means more tough-to-reach oil is produced, which also increases royalties for all Albertans.

Construction is scheduled to begin in 2011, with operation to begin in late 2012.

“We are acquiring the right of way for the pipeline right now and we will get regulatory approval later this year,” said MacGregor. “We will start negotiating construction contracts, after we receive regulatory approval.”

In the initial phase, the ACTL will have the same impact as taking 330,000 cars off the road and 2,600,000 cars at full capacity.

The total construction cost about of the ACTL is about $600 million.

Carbon capture catches on

Carbon capture projects planned by Royal Dutch Shell and Calgary-based power generator TransAlta Corp. have also received government backing.

In October, TransAlta Utilities received $779 million from the federal and provincial governments to retrofit the Keephills 3 coal-fired plant, which is currently under construction.

The project will capture and store up to one-million tonnes of CO2 annually beginning in 2015.

The CO2 will be injected below the earth’s surface near the plants in Wabamun or the CO2 will be purified for use in enhanced oil recovery. The provincial government contributed $431 million and Ottawa added $343 million in funding.

In the same month, the federal and provincial governments invested $865 million over the next 15 years in Shell Canada’s Quest project.

In this project, Alberta contributed $745 million and Ottawa added $120 million in funding to sequester CO2 from the Scotford upgrader, which is also under construction.

The Alberta Carbon Trunk Line (ACTL) and the TransAlta and Shell projects are part of $2 billion in funding Alberta has earmarked to push forward carbon capture and storage technology.

The provincial government believes that the capture and permanent storage of CO2 will lead to significant reductions in emissions of greenhouse gases in Alberta.