Key facts
- Alberta's largest oil sands producers and the provincial and federal governments have signed a trilateral MoU.
- The agreement advances the Pathways carbon capture project in northeast Alberta.
- The project aims to capture 6 million metric tonnes of CO2 annually by January 2035.
- The Oil Sands Alliance includes Canadian Natural Resources, Cenovus, Suncor, Imperial Oil, and ConocoPhillips Canada.
- The first phase involves diverting CO2 from 13 oil sands facilities to an underground storage hub.
- Canada offers investment tax credits for carbon capture, utilization, and storage (CCUS).
Alberta's largest oil sands producers have reached a trilateral memorandum of understanding with the provincial and federal governments to advance the Pathways carbon capture project. This agreement potentially concludes years of negotiations and aims to significantly reduce emissions from oil sands operations.
The Oil Sands Alliance, comprising Canadian Natural Resources, Cenovus, Suncor, Imperial Oil, and ConocoPhillips Canada, will move forward with the Pathways project in northeast Alberta. The initiative is designed to capture 6 million metric tonnes of carbon dioxide per year by January 2035. These producers collectively account for approximately 95% of Canada's oil sands output.
The initial phase of the Pathways project involves diverting CO2 from 13 oil sands facilities located in the Fort McMurray, Christina Lake, and Cold Lake regions. The captured CO2 will be transported via more than 650 kilometers of pipeline to an underground storage hub near Cold Lake. The alliance is committed to prioritizing Canadian suppliers for pipeline procurement. Future expansions of the Pathways project are planned to achieve an additional 10 million metric tonnes per year of emissions reductions, with half of this target to be met by 2040 and the remainder by 2045.
While a definitive cost estimate was not released by the Oil Sands Alliance, Cenovus CEO Jon McKenzie indicated in June that the project could cost as much as C$30 billion (approximately $21 billion). Canada is supporting these efforts through investment tax credits for capital expenditures related to carbon capture, utilization, and storage (CCUS), and intends to legislate further credits for CCUS in enhanced oil recovery.
Definitive agreements between the oil sands companies and both levels of government are anticipated by November 15. The trilateral accord outlines shared objectives including expanding market access, increasing oil production, reducing emissions, and engaging with Indigenous groups.
Furthermore, the Pathways project is linked to the proposed 1 million barrels per day West Coast Oil Pipeline (WCOP) announced recently. This pipeline, intended to run to greater Vancouver, British Columbia, will largely follow the route of the Trans Mountain system. Canada and Alberta are leading the WCOP initiative, with Pembina Pipeline holding a 10% stake. The WCOP project is estimated to cost up to C$44 billion.