Shell Canadian carbon capture project begins
OREANDA-NEWS. November 10, 2015. Shell has started commercial operations at its Quest carbon capture and storage (CCS) project in Alberta, Canada.
Quest is the world's first commercial-scale CCS project to tackle carbon emissions from an oil sands development. It will capture and store underground over 1mn t/yr of CO2 produced during bitumen processing at the 60pc Shell-owned Athabasca oil sands project.
The bitumen produced by the Athabasca oil sands project is piped to Shell's Scotford uggrader for processing into synthetic crude. Quest will capture one-third of the CO2 emissions from the upgrader and transport it through a 65km pipeline for injection more than 2km underground "below multiple layers of impermeable rock formations", Shell said.
"Quest is now operating at commercial scale after successful testing earlier this year, during which it captured and stored more than 200,000t of CO2 ," the firm said.
Oil producers have decades of experience capturing and injecting CO2 into depleted reservoirs for enhanced oil recovery. The Quest project in contrast is storing CO2 in a saline aquifer, which have the potential to store decades or hundreds of years of CO2 emissions, according to the International Energy Agency. They often require significant government support, however, because they tend to provide little financial benefit for project developers.
Quest has required heavy funding commitments from provincial and federal governments in Canada to get it off the ground. Shell estimated back in 2012 that the cost of building the project and operating it for 10 years would be C\\$1.35bn (\\$1bn). Canada's federal government and the provincial government in Alberta have contributed C\\$865mn (\\$650mn) towards that. The rest will be met by Shell and its partners in the Athabasca oil sands project — Chevron and US firm Marathon Oil.
Shell and its partners will not see a return on their investment in Quest unless emissions regulations in Alberta are reformed. The newly elected provincial government plans to triple the effective carbon price for major CO2emitters to C\\$6/t (\\$4.50/t) in 2017. But CCS projects need a much higher carbon price than that to be commercially viable. Shell is a leading proponent of carbon pricing, but it says it went ahead with Quest to responsibly manage its Canadian oil sands resources rather than make a financial return.
There are now 15 large-scale CCS projects in operation around the world, more than twice as many as were in operation in 2010, according to a report the Global CCS Institute released today. The number of large-scale projects could increase to 22 within the next two years.
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