Shell gains funding for Quest CCS project in Canada

By OGJ editors
HOUSTON, June 24
-- Royal Dutch Shell PLC signed agreements in which the governments of Alberta and Canada agreed to provide $865 million (Can.) for Shell’s Quest carbon capture and storage (CCS) project in Canada. The funding is to be phased over 15 years.

The Quest project will capture and permanently store deep underground more than 1 million tonnes/year of carbon dioxide from Shell’s Scotford upgrader near Edmonton. It processes heavy oil from the Athabasca oil sands. CO2 injection is scheduled for 2015.

The Alberta government will invest $745 million in Quest from a $2 billion Carbon Capture and Storage Fund. The Canadian government agreed to contribute $120 million from its $795-million Clean Energy Fund. Shell signed letters of intent for Quest funding with provincial and federal governments in October 2009.

Shell plans to make an investment decision in 2012 on whether to proceed with the project, subject to the regulatory process and economic feasibility.

“Quest would be the first application of CCS technology for an oil sands upgrading operation,” says John Abbott, Shell’s executive vice-president, 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.”

The signing of the funding agreement was announced June 24 as part of an event marking the earlier start-up of Shell’s 100,000 b/d expansion of its Athabasca Oil Sands Project (AOSP), bringing total capacity to 255,000 b/d.

AOSP includes the Muskeg River Mine, Jackpine Mine, and Scotford upgrader. Regulatory applications for the Quest Project were submitted in November 2010. The Quest project is being advanced on behalf of the AOSP, a joint venture among Shell Canada 60%, Chevron Canada Ltd. 20%, and Marathon Oil Canada Corp. 20%.

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