Canadian midstream companies propose CCS hub for Alberta industrial region

Two Canadian midstream companies are joining forces to create a carbon capture and sequestration hub in Alberta after having submitted a project application to the Alberta Ministry of Energy, the companies said March 14.

The CCS project, being developed by Inter Pipeline and Rockpoint Gas Storage, would bring 6 million mt/year of CO2 of storage capacity on an open access basis to Central Alberta's Industrial Heartland if approved, the companies said in a statement.

The Industrial Heartland is Canada's largest hydrocarbon processing region with a growing number of low-carbon offerings. The cluster of chemical, petrochemical, oil and gas industries also produces low-carbon hydrogen and is home to the world's largest CO2 pipeline, according to the Alberta government.

Developed by Inter Pipeline and Rockpoint Gas Storage, the project advances the companies' low-carbon strategy by providing opportunities to customers for emissions reductions. As planned, the project will initially offtake emissions from Inter Pipeline's existing assets, then will have the ability to scale to support future petrochemical and energy transition projects in the Industrial Heartland.

"The opportunity to develop a carbon capture sequestration of this scale will further position Alberta as a leader in energy transition and meet its decarbonization targets," said Inter Pipeline CEO Brian Baker in the March 14 statement. "We believe timely access to economic pore space is a critical enabler to the development of net zero industrial projects and IPL and Rockpoint have the resources and experience to execute on all of the components of a large-scale carbon capture and storage project."

The project has also received support from the Montana First Nation of Maskwacis, Alberta.

The project application is now in the Alberta Ministry of Energy's review process, which is expected to select hub and hub operators for the Industrial Heartland by the end of March. Successful applicants will gain the right to drill sequestration wells, conduct evaluation testing, establish monitoring baselines and begin carbon injections into subsurface formations.

Proposed carbon sequestration hubs have been cropping up in recent years across Alberta. The Open Access Wabamun Carbon Hub, for instance, is awaiting permits from the Alberta government to store 4 million mt/year of CO2 in Edmonton, Alberta by 2025. The hub is being developed in response to the government of Alberta's call for carbon storage hub proposals.

Alberta is Canada's primary oil and natural gas-producing province and is home to Canada's oil sands, which account for about 10% of Canada's overall greenhouse gas emissions. The government's push for more investments in carbon capture is among efforts to undo the longstanding reputation of oil sands being dirty as Canadian oil production is back and on the on the rise.

The Canadian federal government is also planning to introduce tax credits for projects that capture and permanently sequester CO2. Credits would not be available to projects that use captured carbon for enhanced oil recovery.

According S&P Global Commodity Insights, the assessed price of tech carbon capture credits – a basket assessment that reflects credits issued by a range of technology projects that remove or avoid emissions – was $132/mt of CO2e as of March 13, down from a Jan. 23 peak of $170.