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Shell, ATCO to build carbon capture and storage project in Alberta

Polaris project to capture 650,000 tonnes of carbon dioxide per year

Shell's carbon capture and storage plans will be extended to its Scotford complex, where it aims to capture 650,000 tonnes of carbon dioxide per year. (Courtesy Shell)

Shell Canada Products and ATCO EnPower will partner to construct a carbon capture and storage (CCS) project in Alberta designed to capture approximately 650,000 tonnes of carbon dioxide (CO2) per year.

Named Polaris, the carbon capture project is to be located in the Shell Scotford Complex approximately 40 kilometres northeast of Edmonton. The Scotford facility is also home to the Quest carbon capture and storage project, which Shell operates and partially owns.

The CO2 from Polaris will be transported to the Atlas Carbon Storage Hub, also in Scotford, where the greenhouse gas will be stored underground. ATCO EnPower, the sustainability focused branch of the Calgary-based engineering company, will be an equal partner in the Atlas hub with Shell.

Both projects are expected to be operating by the end of 2028. The cost of the CCS project is not disclosed.

"Carbon capture and storage is a key technology to achieve the Paris Agreement climate goals," Huibert Vigeveno, Shell's downstream, renewable and energy solutions director, said in a release. "The Polaris and Atlas projects are important steps in reducing emissions from our own operations."

The announcement of a final investment decision by both companies comes as oil majors face questions over their roles in global warming, and large carbon capture projects have their financial viability put to the test.

About Polaris and Atlas

Polaris, which will be entirely owned by Shell, has the potential to cut Scope 1 emissions at the Scotford refinery by up to 40 per cent and up to 22 per cent at the chemical complex, Shell says in the release.

CO2 captured from Polaris will be moved to Atlas via a 22-kilometre pipeline to two storage wells, where it will be injected approximately two kilometres underground in the Basal Cambrian Sands.

Lessons learned from Shell’s experience with the Quest project will be applied to Polaris, the company adds.

The CCS technology is not specified by Shell or ATCO EnPower. But a Shell video about Quest explains CO2 is captured from an upgrader’s hydrogen manufacturing plant with a compound called amine, which absorbs the CO2. The greenhouse gas is then separated from amine, and pressurized to turn the CO2 into a liquid that can be transported via wells. The liquid CO2 is injected underground into a layer of rock.

Since 2015, Quest has captured and stored about one million tonnes of CO2 per year from the Scotford upgrader.

The first phase of Atlas will store the CO2 from Polaris. Shell says future phases could have Atlas store CO2 from other partners and third parties.

The future of carbon capture

CCS has been emphasized by governments in Canada and oil producers as a way to reduce greenhouse gas emissions from the oil and gas sector. The Canadian government offers investment tax credits for CCS, and the Alberta government also offers an incentive to help build the projects.

Oil and gas firms have invested tens of millions into CCS facilities, according to Chemical & Engineering News, but have faced criticism for investments being substantially smaller than the spending on fossil fuels. As producers of fossil fuels, some companies have faced shareholder and activist pressure to commit to more ambitious climate targets.

Shell, one of the largest oil producers, had its shareholders reject a climate resolution from activists in favour of revised targets to reduce Shell’s 2030 carbon intensity and Scope 3 emissions, and removing a 2035 interim target aligned with the goals of the Paris Agreement, GreenBiz reported.

The company plans to invest $10 billion to $15 billion US from 2023 to 2025 for low-carbon solutions including renewable energy, hydrogen and CCS, it says in the release.

The plan for Polaris and Atlas comes months after Capital Power Corp. cancelled plans for its C$2.4-billion carbon capture project near Edmonton.

Wood Mackenzie’s analysis stated CCS projects such as the $16.5-billion Pathways Alliance carbon capture project face financial challenges from uncertainty, putting other efforts at risk unless governments work to reduce those risks.

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