Carbon Trunk Line in the pipe

A proposed pipeline that would carry carbon dioxide from industrial emitters near Edmonton to mature oilfields in east-Central Alberta should give the local energy sector a boost in production.

Map

Map

A proposed pipeline that would carry carbon dioxide from industrial emitters near Edmonton to mature oilfields in east-Central Alberta should give the local energy sector a boost in production.

The Alberta government announced on Tuesday that it will provide $495 million for development of a 240-km pipeline system running from the Industrial Heartland area near Fort Saskatchewan to a site near Clive. The federal government plans to kick in another $63.3 million.

Slated to be called the Alberta Carbon Trunk Line, the project is being undertaken by Enhance Energy Inc. and North West Upgrading Inc.

Work should begin in 2011, with the pipeline expected to be operational by late 2012.

An estimated 2,000 people could be employed directly in connection with the line’s development.

Initially supplying CO2 will be Agrium Inc.’s Redwater fertilizer complex and North West Upgrading’s new upgrader near Fort Saskatchewan.

The system will include receipt facilities near Clive, where CO2 will be distributed to conventional oil and gas fields in the area.

The first project will involve an oil field near Clive, with Fairborne Energy Ltd. acting as operator. Fairborne said the reservoir, which was discovered in the 1950s, could have its lifespan extended by two decades.

Injecting C02 into conventional oil reservoirs displaces the oil and forces it to the surface. Such enhanced recovery has been done in Central Alberta for a number of years, with Glencoe Resources Ltd. and Penn West Energy Trust both collecting CO2 from petrochemical plants in the area.

EnCana Corp. has also been using CO2 for enhanced oil recovery on a much greater scale near Weyburn, Sask.

Greg Stringham, vice-president with the Canadian Association of Petroleum Producers, said only about 20 per cent of the oil in a reservoir is generally recovered in the absence of enhanced production techniques. Secondary production using an agent like water can boost this figure to about 25 to 30 per cent, he added, and tertiary production with C02 could push recovery as high as 40 per cent.

Stringham said there has been a great deal of discussion about the potential of enhanced oil recovery for mature oil reservoirs in Central Alberta.

Last year, Enhance Energy president and CEO Susan Cole estimated that enhanced oil recovery using CO2 could increase the production at mature oil wells in Central Alberta by 10 to 20 per cent.

The Alberta Carbon Trunk Line will have a capacity of 40,000 tonnes of CO2 per day, which would equate to more than 14 million tonnes a year — the equivalent to the CO2 produced by 2.6 million cars. Initial volumes are expected to be about 5,100 tonnes per day.

Alberta’s funding for the project will be provided over a 15-year period, with the federal money expected to be spent in three to four years.

hrichards@bprda.wpengine.com