Shell Canada to Proceed with Alberta Carbon Capture Project

Royal Dutch Shell PLC's Canadian unit said Wednesday it will proceed with the proposed Quest carbon capture and storage project, the first such commercial-scale project to tackle carbon emissions in the Alberta oil sands.

Shell said the project will be built on behalf of the Athabasca Oil Sands Project joint-venture owners, which also include Chevron Canada Ltd. and Marathon Oil Canada Corp. Shell Canada owns 60% of the joint venture, with the two partners each holding 20%.

The Athabasca joint venture produces bitumen, which is piped to Shell's Scotford Upgrader near Edmonton, Alberta. Starting in late 2015, Quest will capture and store deep underground more than 1 million metric tons a year of carbon dioxide produced during the bitumen processing, Shell said, reducing direct emissions from the upgrader by up to 35%.

In a statement, Shell didn't disclose the estimated total cost of the Quest project, though it said the Alberta and Canadian governments will invest 745 million Canadian dollars ($756 million) and C$120 million, respectively, to support the project as part of initiatives to reduce greenhouse gas emissions. The Canadian government has previously put the cost of the Quest project at C$1.35 billion.

Copyright (c) 2012 Dow Jones & Company, Inc.

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