Canada’s Strathcona plans carbon capture at oil sands

Canada

CALGARY, July 10, 2024 – Canadian oil sands producer Strathcona Resources is planning carbon capture projects at its assets valued at up to USD 1.5 billion, the company announced on Wednesday.

Strathcona described the move as aimed at mitigating its current and future obligations under Canada’s carbon tax regime.

The projects will take place under a strategic partnership with the Canada Growth Fund (CGF), a public investment vehicle that will contribute 50% of their upfront capital costs and eventually be reimbursed via revenue flows from carbon credits.

CGF will invest up to USD 730 million in the carbon capture and sequestration (CCS) infrastructure to be built on Strathcona’s assets, with an initial commitment of around USD 367.2 million matched by Strathcona.

The Canadian company will own and operate the CCS assets.

Strathcona produces around 90,000 bopd of heavy oil and bitumen from its steam-assisted gravity drainage (SAGD) oil sands facilities.

These operations have associated emissions of around 3 million tonnes of CO2 per year.

Canada’s carbon tax came into effect in 2019 at CAD 20 (USD 14.7) per tonne and increased steadily in the years since. In April, the tax rose from CAD 65 to CAD 80, and it is set to climb by an additional CAD 15 per year until 2030, when it will reach CAD 170 (USD 125) per tonne.

Photo courtesy of Strathcona Resources.