Athabasca may beat Pathways on carbon capture, storage
Intermediate producer Athabasca Oil Corp. could be poised to lap its much larger oilsands peers in deploying the first carbon capture and storage technology to cut emissions.
The Calgary-based firm said Wednesday it will partner with clean tech firm Entropy Inc. to build a carbon capture and storage (CCS) project at its Leismer oilsands site capable of capturing 500,000 to 600,000 tonnes of CO2 per year when fully built out.
A final investment decision is expected next year on the first phase of the project which would capture 160,000 tonnes of CO2 per year in what would be the first commercial deployment of CCS in the oilsands. The project will be funded by Entropy in a long-term off-take agreement that will see the Calgary-based company collecting the carbon offsets generated by each tonne of Athabasca's emissions and then selling those credits back to carbon markets.
The project could be on-stream within two years, Entropy CEO Michael Belenkie said in an interview.
“These are investments, commercial Investments, in commercial carbon capture and storage, that are the prototype for what the entire market should become,” Belenkie said.
Athabasca said its aiming for a 30 per cent reduction in greenhouse gas emissions intensity by 2025, based on 2015 levels.
The Pathways Alliance, a consortium of six of the largest oilsands firms in the sector, proposed a massive carbon capture storage hub and pipeline in 2021 — but member companies have yet to sanction the $16.5-billion project despite Ottawa's announcement last April of a 50 per cent investment tax credit for carbon capture storage and utilization projects.
Pathways Alliance members have since said they're seeking more certainty from governments around carbon pricing and the rules around carbon credits and credit markets.
In the meantime, Entropy is already operating a 47,000 tonne-per-year carbon capture project on parent company Advantage Energy Ltd.'s Glacier gas plant, with plans to expand to 200,000 tonnes per year.
“We're not slowing down and hoping the government throws more capital at us,” Belenkie said. “The market's been set, we've set our own targets, we're taking our own risk and we're trying to roll that capital out.”
In its 2023 outlook, Athabasca announced a $145-million capital program focused on its thermal oil assets, including a boost to production at Leismer, up approximately 13 per cent from the $128 million the company budgeted for this year.
The company said it expects to maintain production next year at around 34,500 to 36,000 barrels of oil equivalent per day (boe/d) with further growth materializing in 2024 as maintenance and upgrading projects come on-stream.
Athabasca, which struggled to obtain credit in order to survive when oil prices crashed in 2020 as a result of the pandemic, said Wednesday that it had achieved its debt target ahead of expectations and expected to be in a net cash position in the first quarter of 2023.