Carbon pipe creates optimism

A pipeline carrying carbon dioxide from near Fort Saskatchewan to mature oilfields in Central Alberta should create new opportunities for the local service sector, says the CEO of a company behind the project.

A pipeline carrying carbon dioxide from near Fort Saskatchewan to mature oilfields in Central Alberta should create new opportunities for the local service sector, says the CEO of a company behind the project.

“I really believe what we’re doing is creating a whole new industry,” said Enhance Energy Inc.’s Susan Cole.

“And that’s not just on the production side of oil. In order to have that production, the whole service sector is going to get involved.”

Enhance Energy Inc. and North West Upgrading Inc. plan to develop a 240-km pipeline to transport CO2 for injection into wellsites in Central Alberta. Cole thinks such enhanced oil recovery could boost by 10 to 20 percentage points the amount of oil that can be extracted from area reservoirs, up from current totals of about 40 per cent using traditional water flood techniques.

“We’re really revitalizing all of those old oilfields that have essentially reached the end of their lives using conventional methods.”

Central Alberta’s mature oilfields are ideal candidates for CO2 stimulation, and a major reason the decision was made to run the Alberta Carbon Trunk Line here, said Cole.

“We see the potential of hundreds of reservoirs being able to take the CO2.”

One of the first recipients will be an oilfield near Clive, with Fairborne Energy Ltd. the operator. Officials with Fairborne have said CO2 stimulation could extend the lifespan of the reservoir, which was discovered in the 1950s, by two decades.

The Alberta and Canadian governments announced last week that they will contribute $495 million and $63.3 million respectively to the pipeline project. Work is slated to begin in 2011 and wrap up by late 2012.

Construction details should be finalized over the next six to 12 months, said Cole.

“The next phase that we’ll go through will be the detailed engineering and the construction planning. We could go south-north or we could go north to south.”

Economic benefits should be felt all along the line, said Cole.

“It would peak at around 2,000 direct jobs with the construction, but we anticipate there will be a lot more jobs just with ongoing operations as we add more enhanced oil recovery projects to the pipeline.”

Red Deer, in particular, should enjoy spinoffs — including companies here that develop expertise in enhanced oil recovery.

“Red Deer could easily become a hub, because we’re starting this whole process at Clive, which is going to be the anchor project.”

Originating in the Industrial Heartland area near Fort Saskatchewan, the Alberta Carbon Trunk Line will initially carry CO2 from Agrium Inc.’s Redwater fertilizer complex and North West Upgrading’s new upgrader near Fort Saskatchewan. Other companies are expected to come on board later.

The line will have a capacity of 40,000 tonnes of CO2 per day, although initial volumes are expected to be about 5,100 tonnes per day.

The receiving station will be near Clive, although it’s likely the pipeline will eventually be extended, said Cole.

“Really what we’re building is the first phase in 2011 and 2012, and from there the pipeline will just expand.”

Glencoe Resources Ltd. and Penn West Energy Trust have already been using enhanced oil recovery in Central Alberta, using CO2 from petrochemical plants.

hrichards@bprda.wpengine.com

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