Agreement will allow Atlas carbon storage hub project to proceed. [Image: Government of Alberta. Alberta energy minister Brian Jean (left), Shell Canada country chair Susannah Pierce and ATCO EnPower COO sign Alberta's first carbon sequestration agreement.]

By Dale Lunan

Shell Canada and ATCO EnPower said July 8 they had signed Alberta’s first carbon sequestration agreement, converting Phase 1 of a pore space evaluation agreement underpinning their joint Atlas carbon storage hub.

Shell and ATCO sanctioned the first phase of the hub’s development in late June, alongside Shell’s positive final investment decision for its Polaris carbon capture and storage (CCS) project, which will capture emissions from its Scotford complex near Edmonton and sequester them at Atlas, about 45 km east of Edmonton.

“We’re moving as quickly as anywhere in the world to develop CCUS (carbon capture utilisation and storage), which is a critical tool in meeting our emissions targets,” Alberta energy minister Brian Jean said. “I am confident other hub operators won’t be far behind Atlas to get their projects moving in this new and exciting energy sector.”

With the sequestration agreement in place, Shell and ATCO can now apply for necessary regulatory approvals, including Directive 65 project approval from the Alberta Energy Regulator (AER) for carbon capture, transportation and subsurface injection activities.

“Carbon capture and storage is a key technology to help reduce emissions from our own operations,” Shell Canada president and country chair Susannah Pierce said. “Alberta is a leader in developing regulations to support CCS development and investment, and this leadership was critical in reaching today’s agreement which enables us to take the important next steps in advancing the Atlas carbon storage hub along with our partner ATCO EnPower.” 

A total of 25 projects, including Atlas, were selected by the provincial government in 2022 to begin exploring how to safely develop carbon storage hubs. All the projects have signed pore space evaluation agreements and are moving towards signing sequestration agreements with the province, which is exploring other carbon storage opportunities and is now accepting applications for small-scale and remote carbon storage projects.

By 2035, CCUS and CCS is expected to be a C$35bn business in Alberta, spurred by the Alberta Carbon Capture Incentive Program (ACCIP), which provides grants of up to 12% for new eligible capital costs in CCUS and CCS projects.

ACCIP is conditional on the federal government implementing its own CCUS investment tax credit and operating supports, such as carbon contracts for difference.

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