A unique feature of Strathcona Resources oil sands facilities in Lloydminster and Cold Lake is partly responsible for the oil sands company getting $1 billion toward Carbon Capture and Storage infrastructure from the Canada Growth Fund (CGF).
The Lloydminster and Cold Lake regions are directly above CO2 storage reservoirs, allowing for local injection without it having to be transported elsewhere. There will be an initial investment of $500 million towards Strathcona’s carbon capture infrastructure.
Strathcona will construct, operate, and own the CCS infrastructure, with a 50-50 share of the initial capital costs split between CGF and Strathcona. Strathcona will own the CCS infrastructure and get the associated carbon credits. It will repay CGF’s investment over time from the cash flows generated by the CCS infrastructure.
Strathcona produces about 90,000 barrels per day of heavy oil and bitumen from its steam-assisted gravity drainage (SAGD) assets. The associated emissions are about three million tonnes of CO2 per annum. A maximum of $2 billion will be available through the partnership to capture up to two million tonnes of CO2 per annum.
Saskatchewan has granted Strathcona subsurface CO2 sequestration rights, making Strathcona the first and only oil sands producer in Canada with approval to capture and store CO2.
