Quest Completes Letter of Intent

The Government of Alberta would contribute $745 million from its $2 billion CCS fund while the Government of Canada would provide Quest $120 million from its $650 million CCS fund.

The letters of intent were officially signed today at Government House in Edmonton, Alberta. Alberta’s Energy Minister, the Honourable Mel Knight and federal Minister of Natural Resources, the Honourable Lisa Raitt were both on hand to sign the respective documents with Shell representative, Graham Bojé, VP, HSSE & SD, Heavy Oil.

“Both the government of Alberta and Government of Canada should be commended for their leadership and vision on advancing CCS deployment in Canada,” said Graham Bojé. “Finding ways to manage greenhouse gas (GHG) emissions is one of the most important challenges facing society and developing substantial CCS capability with governments and key stakeholders is one of our greatest priorities.”

At the end of June 2009, the province selected the Quest CCS Project to enter into discussions for a Letter of Intent (LOI). The Alberta Government is still pursuing letter of intent with other proponents for the remaining available funding. The LOI is not a legally binding agreement, but provides the basis for the negotiation of a funding agreement – which will include all the terms and conditions associated with the funding.

“While today’s announcement is extremely important, I want to stress that Quest has a long way to go before becoming a fully operational CCS project. We are still in the project development phase and a final investment decision depends on a range of factors including the outcome of a structured consultation program, the results of appraisal activities, integrated studies and of course regulatory approval,” said Bojé.

“This milestone represents a special achievement for the Quest team, which is undertaking arduous technical, commercial and societal challenges to deliver real reductions in CO₂ emissions,” said Jean Louis Alixant, Quest Venture Manager. “There is a growing community of CCS specialists within Shell, the industry, academia and government that is working hard to ensure that society learns fast and makes the most of the CCS opportunity in a responsible manner. This announcement is a very positive sign that will stimulate our common efforts”.

Shell views CCS as one of the key pathways to reduce CO₂ emissions along with others such as energy efficiency and developing alternative energies. The appeal of CCS stems from the technical feasibility of implementing large-scale projects, thereby starting to address the emissions of the existing base of large CO₂ emitters while developing the framework and infrastructure to support broader deployment CCS technology and maturing parallel pathways.

Quest is a fully integrated CCS scheme, meaning it would capture, transport, inject and store CO₂. Over one million tonnes of CO₂ would be captured from the Scotford Upgrader, transported safely by pipeline to an injection location northeast of the Scotford Complex and stored permanently more than two kilometers deep under thick layers of impermeable geological formations.