Kineticor ResourceCorp. plans to build a 100-MW power plant near Peace River, Alberta,that will burn waste natural gas from heavy oil projects in the region.
The planned C$100 million facility will significantly reducethe flaring of methane in the area, the Calgary, Alberta-based company said in aJuly 20 statement. The project will be connected to Alberta's power grid and willreduce emissions by more than 3.1 million metric tons of CO2 equivalent over itslifetime, Kineticor said. The plant is expected to be in operation by the secondhalf of 2017.
Alberta's government has committed to transitioning from thecoal-fired generators that produce about half of its power to lower-emitting sourcesby 2030. Growth in natural gas-fired power has been stymied as companies with historically low electricityprices in the energy industry-dependent province, which has been hit by a prolongedslump in oil and gas prices. Using waste gas that is normally burned or vented tothe atmosphere as a fuel will help meet a pledge by Canada's federal governmentto lower methane emissions by 40%, Kineticor said.
"The project is reducing both costs and emissions typicallyassociated with natural gas processing and distribution to a power plant by producingpower directly on-site," Kineticor CEO Andrew Plaunt said in the statement."This reduces the emissions intensity and cost base required for clean, efficientand reliable power production in the province, while offering producers in the PeaceRiver area an attractive and economic solution to conserve their associated gas."
Kineticor did not name the oil companies that will supply gasto its Alberta project. Power from the province's deregulated generation sectoris sold into the grid under a bid system run by a government agency. In March, thecompany started generating power from a similar1-MW facility near Shaunavon, Saskatchewan. Output from that plant is sold to province-ownedutility SaskPower.