| CALGARY, Alberta
CALGARY, Alberta Aug 27 Shell Canada
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
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 and
Marathon Petroleum Corp, into refinery-ready crude. The
CCS project will capture 35 percent of direct emissions from the
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)