Canadian oil producer Strathcona Resources said on Wednesday it has partnered with Canada Growth Fund (CGF) to build carbon capture and sequestration (CCS) infrastructure in Saskatchewan and Alberta provinces.
Strathcona and CGF, a federal clean-tech financing agency, will each invest up to C$1 billion ($734.38 million) to fund the project that will seek to capture and permanently store up to 2 million tonnes of carbon dioxide annually.
Carbon capture is a process through which carbon dioxide generated from industrial activity is stored underground.
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CONTEXT
CGF will initially commit C$500 million in funding the project, with the option to upsize its commitment to C$1 billion.
The partners will each fund 50% of the capital costs to build CCS infrastructure on the energy producer’s oil sands facilities.
Strathcona will build, own and operate the CCS projects and receive all investment tax credits. The company expects to eliminate a substantial part of its future carbon tax liability through this project.
WHY IT’S IMPORTANT
Last year, Canada said it will finance investment tax credits for CCS and net-zero energy technologies, following through on previously announced subsidies meant to attract more green investment.
Canada, the world’s fourth-biggest petroleum producer, sees the process as the key to decarbonizing the country’s oil sands.
Last year, Prime Minister Justin Trudeau had said he wanted his country to be a leading global supplier of green technology.
($1 = 1.3617 Canadian dollars)
(Reporting by Vallari Srivastava in Bengaluru; Editing by Mohammed Safi Shamsi)
