Canadian Natural Resources Ltd., the nation's largest oil and natural gas producer, has wrestled per-barrel emissions intensity from its oil sands operations in Alberta to near the global average, the company's president said.
The Calgary, Alberta-based company is using carbon capture and sequestration technology, along with other pollution-reducing initiatives, to cut emissions intensity at its Horizon facility to 5% above the average for global oils, Steve Laut said on a conference call. The company expects to reduce its greenhouse gas output by 2.7 million tons annually by using carbon capture operations linked to the Scotford upgrader and Sturgeon refinery, which processes tar-like bitumen from the company's oil sands operations.
Canada's oil sands companies are seeking ways to reduce emissions amid pressure from provincial and federal governments. Canadian Natural has conventional heavy oil resources, and it mines and processes oil-laden sand in northeastern Alberta. It also has offshore operations in the U.K., the North Sea and Cote d'Ivoire in West Africa.
Laut, who is transitioning to the role of executive vice chairman, plans to give the company's sustainability efforts more attention. "With investment in technology, we have made significant progress on reducing our greenhouse gas emissions, and there is a pathway to reducing the greenhouse gas emission intensity from oil sands production to levels that are below that of the average oil produced globally," Laut said on the March 1 earnings call.
Oil sands operators supported the Alberta government's cap on emissions from the sector and a so-called carbon tax to help woo pipeline opponents, who have stifled efforts to boost export capacity. While the federal government, led by Prime Minister Justin Trudeau, approved an expansion of Kinder Morgan Inc.'s Trans Mountain expansion project, opposition by British Columbia's provincial government and municipalities has stalled construction. Laut called the project a critical infrastructure investment.
North West Refining's Sturgeon facility, shown under construction, will help Canadian Natural Resources sidestep some pipeline bottlenecks. Source: North West Refining |
"Many external opinions of oil sands operations are based on outdated data from many, many years ago," Laut said. "The value of Canada's oil sands is very important to Canada. Not only is the industry making significant strides in reducing our environmental footprint, but creating hundreds of thousands of jobs for Canadians and adding significantly to all government revenues."
Canadian Natural plans to slow development of some heavy oil projects and move up plant turnarounds after an outage on TransCanada Corp.'s Keystone pipeline network in November caused the value of Canadian heavy crude to plummet compared with U.S. benchmark crude. "In the short term, as a result, we will be slowing down the ramp-up of wells and temporarily delaying the completions on some heavier wells," COO Tim McKay said on the call.
The company should be able to sidestep some of the pipeline woes as the Sturgeon refinery, which Canadian Natural owns with closely held North West Refining, starts full operation. The plant near Edmonton, Alberta, will upgrade bitumen into diesel fuel and other higher-value petroleum products. The facility produced its first diesel fuel in December 2017 and is expected to process about 80,000 barrels per day of diluted bitumen when it reaches full operation later in 2018. The Alberta government committed the bitumen it receives as royalties to be processed at the facility to help with its financing.
Separately on March 1, Canadian Natural reported fourth-quarter 2017 funds flow from operations, a key financial metric, of C$2.31 billion, or C$1.88 per share, compared with C$1.68 billion, or C$1.50 per share, a year earlier. Production of oil and natural gas rose to 1.02 million barrels of oil equivalent per day in the fourth quarter, from 859,577 boe/d in the same period a year ago.

