Royal Dutch Shell Plc  .com Rotating Header Image

Shell proposes large-scale CCS facility in Alberta

Shell proposes large-scale CCS facility in Alberta

Tuesday, July 13, 2021, 12 AM MDT

CALGARY, AB, July 13, 2021 /CNW/ – Today, Shell announced a proposal to build a large-scale carbon capture and storage (CCS) project at its Scotford Complex near Edmonton. This would be a key step in transforming Scotford into one of five energy and chemicals parks for Shell around the world, providing customers with lower-carbon fuels and products into the future, such as hydrogen.

The proposed Polaris CCS project, the largest in a series of low-carbon opportunities Shell is exploring at Scotford, would capture carbon dioxide (CO2) from the Shell-owned Scotford refinery and chemicals plant. The initial phase is expected to start operations around the middle of the decade, subject to a final investment decision by Shell expected in 2023. Polaris would have storage capacity of about 300 million tonnes of CO2 over the life of the project.

“Shell is making bold moves to decarbonize our operations, and wider industry, and the Polaris CCS project is the latest example,” said Susannah Pierce, Shell Canada President and Country Chair. “Our plans for Scotford are in line with Shell’s target to become a net-zero emissions energy business by 2050, in step with society. We are creating a world-class site that will provide customers with lower-carbon fuels, products and CO2 storage. Polaris would also make a significant contribution to Shell’s aim to have access to an additional 25 million tonnes a year of CCS capacity by 2035.”

The Polaris CCS project follows the success of the Quest CCS facility at Scotford, which has captured and safely stored more than six million tonnes of CO2 in its six years of operation. Recently, Shell has also taken a final investment decision on the Northern Lights CCS project in Norway and is part of the Porthos CCS project in the Netherlands.

“Our government is committed to developing carbon capture, utilization and storage (CCUS) to help reduce emissions and capitalize on emerging economic opportunities,” said Sonya Savage, Alberta Minister of Energy. “Projects like Shell’s Polaris CCS show that Alberta is open for business and our oil and gas industry confidently looks to be a global player in a low-carbon future.”

The initial phase of the Polaris CCS project would capture and store approximately 750,000 tonnes a year of CO2 from the Scotford refinery and chemicals plant. It would reduce Shell’s direct and indirect emissions (Scopes 1 and 2) by up to 40% from the refinery and by up to 30% from the chemicals plant. It would also create up to 2,000 jobs.

The second phase of the Polaris CCS project involves the creation of a CO2 storage hub in Alberta, further decarbonizing Shell’s facilities and storing emissions on behalf of third-party industry sources as a trusted and reliable CO2 storage operator. Fully built, and contingent on acquiring pore space leases from the Province of Alberta, Polaris could serve as a CO2 storage hub for more than10 million tonnes of CO2 each year.

Once fully built, Polaris would contribute to the Edmonton region becoming Canada’s first hydrogen hub. In the initial phase of Polaris, CO2 captured from the refinery’s hydrogen plants would produce blue hydrogen for use in the refining process, with the potential for large-scale blue hydrogen production in future phases. Shell is also exploring the development of additional volumes of blue and green hydrogen at Scotford that leverage Alberta’s abundance of natural gas and availability of renewable sources of power.

The transformation of Scotford into an energy and chemicals park for Shell builds on the site’s leading positions in energy efficiency and CCS, while including renewable sources of power and bio-feedstocks. CCS and renewable power will allow Scotford to process new feedstocks such as bio-oils or waste oils to significantly reduce the CO2 emitted in the production of the fuels of today. Scotford’s transition into a fully integrated energy and chemicals park is anticipated to happen this decade.

Additional quotes:

Rod Frank, Mayor, Strathcona County: “Strathcona County is proud to be the home of Shell Scotford, one of Shell’s five global energy and chemicals parks. The announced Polaris CCS project, located within Alberta’s Industrial Heartland, aligns with Strathcona County’s Strategic Plan, delivering economic development and environmental sustainability simultaneously. Polaris CCS will create new jobs, support our local economy, enhance business certainty, investment attractiveness, and aid in recovery from COVID-19. It will also reduce carbon emissions and move our region closer to becoming North America’s Hydrogen Hub, the fuel of the future.”

Beth (Hardy) Valiaho, Vice President Strategy and Stakeholder Relations of the International CCS Knowledge Centre: “We applaud this announcement by Shell Canada. It builds on their expertise in CCS from both the Quest project and the capture technology at Boundary Dam 3 CCS facility. Through the Polaris CCS project and its potential to be a world-class CO2 storage hub, we see, once again, the leadership of Shell Canada in large-scale CCS as a means to reduce carbon emissions and ensure responsible and sustainable energy.”

Notes to editors

  • Polaris CCS would leverage lessons learned from the Quest CCS facility (10% Shell share), also located at Shell’s Scotford Complex near Edmonton, Alberta, adjacent to Shell’s refinery and chemicals plant (100% Shell share). Since its start up in 2015, Quest has captured and stored about one million tonnes a year of CO2 from the Scotford upgrader, with operating costs about 30% lower than originally projected.
  • Quest CCS is operated by Shell on behalf of the Athabasca Oil Sands Project (AOSP) joint venture. The respective ownership interests of AOSP assets in aggregate, directly and indirectly, are 70% Canadian Natural Resources Limited and an affiliate, 20% Chevron Canada Limited and 10% Shell Canada Limited through certain subsidiaries.
  • The first phase of the Polaris CCS project would focus on post-combustion capture from the Scotford refinery’s hydrogen plants (steam methane reformers) and take a CO2 waste stream from the mono-ethylene glycol (MEG) plant. CO2 captured from the MEG plant would produce low-carbon chemicals (blue MEG) for use in the manufacture of consumer products both domestically and overseas.
  • CO2 emissions captured from the first phase of Polaris CCS would be transported via a 12-kilometre (km) pipeline to storage wells located near Josephburg, Alberta. There, CO2 would be stored more than 2 km underground in the Basal Cambrian Sands, the same formation used to store CO2 from the Quest CCS facility. This formation, which stretches across much of Alberta, has worked exceptionally well for Quest’s CO2 storage.
  • In its first phase, Polaris would capture more than 90% of the CO2 emissions related to hydrogen production in the Scotford refinery hydrogen plants. The project is designed in a way that no additional freshwater resources are required for the operation of the facility.
  • Under the Government of Alberta’s Carbon Sequestration Tenure Regulation, a pore space lease, or carbon sequestration lease, grants a company the right to drill wells, conduct evaluation and testing and inject captured carbon dioxide into deep subsurface reservoirs within the location of the lease.
  • Shell’s Scotford Complex is home to Canada’s most energy efficient refinery. The Scotford refinery uses 25% less energy than the average refinery according to the Solomon Energy Efficiency Index (EII)TM. The amount of energy saved is about equal the electricity needed to power more than 100,000 homes (based on the average household electricity use from Energy Efficiency Alberta).
  • In Shell’s 2020 third quarter results, we outlined the future of our global Chemicals and Refining business. Shell plans to concentrate its refining portfolio to a smaller set of core sites that are integrated with Chemicals and Trading, which we refer to as energy and chemicals parks. These locations will maximize the integration benefits of conventional fuels and chemicals production while also offering new low carbon fuels and performance chemicals. They also offer future potential hubs for sequestration.
  • Shell is involved in a slate of CCS projects globally in Australia, Canada, the Netherlands and Norway. For more information visit https://www.shell.com/energy-and-innovation/carbon-capture-and-storage-projects.html
  • Powering Progress sets out Shell’s strategy to accelerate our transition to a net-zero emissions energy business, including reducing emissions from our operations, from the fuels and other energy products we sell to our customers, and capturing and storing any remaining emissions using technology or balancing them with offsets. For more information visit www.shell.com/poweringprogress

Cautionary noteThe companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This announcement contains the following forward-looking Non-GAAP measure: Adjusted Earnings. We are unable to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile the above Non-GAAP measure to the most comparable GAAP financial measure is dependent on future events some which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Royal Dutch Shell plc’s consolidated financial statements.

This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investors and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, July 13, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70

SOURCE Shell Canada Limited

 View original content to download multimedia:

http://www.newswire.ca/en/releases/archive/July2021/13/c7317.html

royaldutchshellplc.com and its also non-profit sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Comments are closed.

%d bloggers like this: