Shell declared that it has inked deals with the Canadian and Alberta governments to receive funds worth $865 million for its Quest Carbon Capture and Storage (CCS) Project in Canada.
The Quest CCS Project will absorb and store over 1 million tons of CO2 annually released from Shell’s Scotford Upgrader located close to Edmonton, Alberta. The facility processes the Athabasca oil sands to produce heavy oil. The CO2 will be stored permanently under the ground.
According to the EVP of Heavy Oil at Shell, John Abbott, the CCS technology would be used for the first time for an oil sands upgrading process. Shell announced the financing deal during a ceremony marking the expansion of its Athabasca Oil Sands Project (AOSP) of 100,000-barrel-per-day, increasing the total capacity of the facility to 255,000 barrels per day. The AOSP comprises the Jackpine Mine, Muskeg River Mine and Scotford Upgrader.
The AOSP is a joint venture between Marathon Oil Canada, Chevron Canada and Shell Canada that hold 20%, 20% and 60% shares, respectively.
Shell submitted the Quest Project’s regulatory applications in November 2010. The financing deal denotes a major landmark prior to Shell’s decision on a financial investment in 2012, based on the results of the economic feasibility and regulatory procedures.