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Shell Canada files paperwork for $1.35B carbon capture project

Aug 3rd, 2011
by John Donovan.
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Regulatory application a first for Alberta

By Dina O’Meara, Calgary Herald August 2, 2011

Shell Canada took its first regulatory step toward commercializing it carbon capture and storage project Quest, which will strip carbon dioxide from its Scotford oilsands upgrader near Edmonton. Photograph by: Ted Jacob, Calgary Herald

CALGARY — Alberta could see its first commercial carbon capture and storage project as soon as 2015 if Shell Canada’s application for its Quest project is approved by provincial regulators — and the energy giant’s board.

Shell filed an application Tuesday on its $1.35-billion Quest joint venture with Chevron Canada and Marathon Oil Sands.

“This is the first application that we’ve received for a commercial-scale CCS project,” said Bob Curran, with Alberta’s Energy Resources Conservation Board, Tuesday.

If Quest proceeds, it will become one of a handful CCS projects around the world to inject carbon dioxide at a commercial level. The project is the poster child for the provincial government’s quest to mitigate the effects of fossil fuel extraction, and is expected to capture up to 1.2 million tonnes of carbon dioxide a year from Shell’s Scotford oilsands upgrader, north of Edmonton.

The controversial technology involves “capturing” carbon dioxide emissions, and transporting the gas via pipeline to deep underground storage — in Shell’s case, an ancient saline aquifer. A successful project would remove the equivalent of 175,000 carbon-emitting cars from the road per year, but comes at a high cost, say both detractors and proponents.

Alberta is funding the project to the tune of $745 million over 15 years, out of its $2-billion carbon capture and storage fund, with Ottawa adding $120 million toward the project. Shell also negotiated a two-for-one carbon credit deal with the province, the only jurisdiction in North America to impose a carbon levy on industry.

The deal was essential for Shell to move forward on the project, expected to be commercial in 2015, and breach the province’s current $15 per tonne of carbon price versus the much higher cost of CCS, the global energy giant said.

“It’s not about profit,” said John Abbott, Shell’s executive vice-president of heavy oil, in a recent interview. “It’s about breaking even.”

The Shell project is one of four the province is funding to reduce greenhouse gases by 500 million tonnes a year by 2015

TransAlta Corp.’s Project Pioneer received $436 million to capture one million tonnes annually from its coal-fired Keephills 3 power plant in Alberta.

Enhance Energy and NW Upgrading Alberta’s Carbon Trunk Line, a carbon capture and transportation project to supply gas for enhanced oil recovery, was awarded $495 million to transport 14 million tonnes annually. Swan Hills Synfuels was granted $285 million to capture 1.3 million tonnes annually from its in situ coal gasification power plant project.

domeara@calgaryherald.com

© Copyright (c) The Calgary Herald

Shell Canada confirms LNG partners

Jul 1st, 2011
by John Donovan.
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An artist’s drawing of the Royal Dutch Shell’s future Prelude Floating Liquefied Natural Gas project in Australia, the world’s first floating LNG facility, is an idea Shell Canada is considering with its partners China National Petroleum Co., Korea Gas Corp. and Mitsubishi Corp. Photograph by: Courtesy, Royal Dutch Shell

Early days for project with Asian firms, spokesman says.

By Rebecca Penty, Calgary Herald June 30, 2011

CALGARY — Shell Canada has partnered with China National Petroleum Co., Korea Gas Corp. and Mitsubishi Corp. to look at building a liquefied natural gas export facility in British Columbia.

Spokesman Larry Lalonde confirmed the company, the Canadian subsidiary of global energy giant Royal Dutch Shell, is in early but exclusive talks with the Asian firms.

The consortium is examining the feasibility of building a liquefaction facility on the West Coast to open international markets for western Canadian gas, which Lalonde called an “abundant” resource Shell has identified as “key” to its growth.

“In terms of LNG specifically, it is an area where we continue to invest globally and it’s an area where we have a leadership position, globally, and we’d like to continue to invest in that as demand grows,” Lalonde said.

Speculation about the firm’s partners has abounded for months and several media outlets, trade journals and research reports have thrown out potential names.

Lalonde couldn’t offer a cost or timeline for project development because that’s dependent on selecting a location, which the firms have yet to do, he said, dismissing recent reports the company had settled on Prince Rupert, B.C.

He was unable to offer details on the nature of the agreements — whether contracts had been inked, at what cost and when talks began.

“Together we are exploring opportunities, but we’re so early in the overall scope of what we may or may not be looking at that there are several things that would have to be solidified upon moving forward,” Lalonde said.

The proposed B.C. LNG facility arose from global relationships Shell has formed with each company, which has meant other projects around the world, Lalonde said.

For example, Mitsubishi and Shell announced in May they would build the world’s first floating LNG facility off Australia, an idea among those the firms are considering for British Columbia, Lalonde confirmed.

“It’s an option. But we’re so early in the process that we haven’t come to an exact design on what anything would look like,” he said.

“We need to secure a location, which we’re still in the process of looking at.”

Shell also has a working relationship with China National Petroleum Co.

Last November, Shell and the Chinese company — the parent of China’s largest energy player, PetroChina Co. — signed a memorandum of agreement in Beijing on what they called “integrated co-operation” on oil and gas projects in Canada and coal bed methane development in China.

And late last month, Shell CEO Peter Voser was again in Beijing to sign a so-called “shareholders agreement” with China National Petroleum Corp. CEO Jiang Jiemin regarding a well manufacturing 50-50 joint venture meant to accelerate large-scale development of shale gas, tight gas and coal bed methane through the standardization and automation of drilling.

Shell’s potential B.C. liquefaction facility would cool dry gas from Western Canada’s prolific basins so it could be put on massive tankers for sea transport to burgeoning economies where gas marketers can earn more than double — by some estimates — what they can for the resource in North America, which is suffering from a supply glut due to the abundance of shale projects that are keeping prices low.

New York-based Oppenheimer & Co. Inc. research analyst Fadel Gheit, who covers Shell, said it will be tough for North American proposals to keep costs low enough to supply Asia with gas, in competition with Australia, Malaysia and Indonesia.

“It depends on the extraction cost,” Gheit said, noting Indonesia doesn’t employ pricey horizontal drilling and hydraulic fracturing to get its gas out of the rock.

Shell is competing for first mover status on B.C. LNG export with Kitimat LNG, a proposed project for B.C.’s northwest by Apache Corp., EOG Resources Ltd. and Encana Corp. that is working through regulatory reviews, before a final investment decision later this year.

Calgary oil and gas producer Progress Energy Resources Corp. also announced in May its $1.07-billion partnership with Malaysian state-owned oil company Petronas to develop the Alberta firm’s shale gas assets and look at the feasibility of a B.C. west coast LNG export facility Petronas would operate.

In March, BC LNG Export Co-operative LLC proposed a more modest LNG export facility for the province’s West Coast.

rpenty@calgaryherald.com
© Copyright (c) The Calgary Herald

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Alberta guide claims Shell project threatens grizzly bear den on his land

May 18th, 2011
by John Donovan.
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Mike Judd, an outfitter in Beaver Mines, near Waterton Lakes National Park, is fighting the approval of a Shell Canada sour gas project. Judd, who guides hunt and dogsled tours, says there’s a den of grizzlies on his land that will be killed if the project goes ahead.

Photograph by: Dean Bicknell, Calgary Herald

A dogsledding tour guide is challenging a Shell Canada sour gas project near his Eastern Slopes home, arguing Alberta’s energy regulator failed to properly take into account the province’s dwindling number of grizzly bears before approving the project.

Mike Judd, 61, has lived near the tiny hamlet of Beaver Mines, just north of Waterton Lakes National Park, his entire life. The outfitter has been guiding backcountry and dogsledding tours for more than four decades.

On Tuesday, Judd was in Calgary to ask Alberta’s Court of Appeal for leave to appeal an Energy Resources Conservation Board ruling giving Shell permission to drill a sour gas well less than two kilometres from his home.

Judd said a grizzly bear den located on his property will be affected by the development.

“Over the course of my lifetime, I’ve been watching the continual erosion of the backcountry with roads and development,” Judd said.

“Living there and loving the country, I’m very concerned about what’s happening with those animals, especially the grizzly bears.”

Judd’s lawyer, Shaun Fluker, argued the board’s March approval of Shell’s sour gas well and fuel-gas compressor did not properly take into account the Alberta government’s decision last year to classify grizzly bears as threatened. The designation, which means the province’s grizzly population is at risk, affords legal protections for the powerful omnivore.

Fluker said during hearings on the project, the board should not have denied Judd the chance to speak about the grizzly den he says is on his land.

“Every den of a grizzly bear is specifically protected by the Wildlife Act,” Fluker said.

However, ERCB spokesman Bob Curran said evidence about the grizzly bear den was not filed on time and following that, Shell was refused access to Judd’s land “where the den was purported to exist.”

Curran said all ERCB hearing participants should have equal access to the evidence.

During Tuesday’s Court of Appeal hearing, the relationship between Judd and the oil and gas giant was described as “adversarial.”

Curran added the board considered significant testimony and evidence on grizzly bears in the area before coming to its decision in March.

“Although there may be some incremental loss of grizzly bear habitat,” said the written ERCB decision, “the board expects that loss of habitat due to this project will not be significant.”

Shell Canada spokesman Stephen Doolan said the sour gas project is scheduled to go ahead this month.

On Tuesday, Court of Appeal Justice Carole Conrad reserved judgment on Judd’s request.

In March, the ERCB rejected Shell’s application for two new pipelines at the site, but allowed a new sour gas well and fuel-gas compressor.

A provincial DNA analysis found just under 700 grizzly bears live in Alberta, and between 350 and 400 of those animals are of breeding age. Scientists believe the fragmentation of grizzly bear habitat is one of the greatest threats to the survival of the Alberta population.

kcryderman@calgaryherald.com

© Copyright (c) The Calgary Herald

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BPZ, Shell unit end talks

Jan 9th, 2009
by John Donovan.
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BPZ Resources Inc. and a unit of Royal Dutch Shell PLC agreed to end talks aimed at jointly exploring for oil and gas in Peru after oil prices slumped.

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Global energy investment hit by financial crisis

Dec 27th, 2008
by John Donovan.
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The growing financial crisis and plunging energy prices have forced companies to scale back spending and delay projects, with expensive ventures in the oilsands hardest hit.

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SIR HENRI DETERDING: An Oil Napoleon

Feb 12th, 2012
by John Donovan.
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THE CALGARY DAILY HERALD: 7 February 1939 Page 4

EXTRACTS

FEW careers in modern times have been more strange and eventual that that of Sir Henri Deterding.

An inveterate enemy of Soviet rule in Russia because of confiscation of the rich Caucasus oil fields, he later swung over to the support of the Hitler movement in Germany and helped to finance it.

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