Pembina Pipeline Corp. and TC Energy Corp., both based in Calgary, Alta., have announced plans to collaborate on a massive carbon transportation and sequestration infrastructure project that will be able to transfer more than 20 million mt of carbon dioxide per year when completed, potentially having a significant impact on Canadian fertilizer operations.
Both major energy companies operate pipeline networks that transport crude oil, natural gas, and liquid natural gas. Pembina recently agreed to acquire Inter Pipeline Ltd., a Calgary multinational petroleum transportation and infrastructure company, for approximately C$15.2 billion.
TC Energy announced on June 9 that its controversial $8 billion Keystone XL Pipeline connecting the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas, plus oil tank farms in Oklahoma, has been officially terminated after U.S. President Joe Biden signed an executive order in January revoking its permit.
The Pembina/TC Energy CO2 distribution project will be built around a new sequestration hub called the Alberta Carbon Grid (ACG), which will connect existing pipelines through an open-access system linking the Fort McMurray region, the Alberta Industrial Heartland, and the Drayton Valley region. The first ACG phase tentatively will operate as soon as 2025, with project completion set for 2027.
The grid would connect Alberta’s largest sources of industrial emissions to a sequestration location northeast of Redwater. Future legs could extend to Joffre, Christina Lake, Cold Lake, or Swan Hills.
There is a great deal of fertilizer production located in Alberta, including Redwater and Joffre (Nutrien Ltd.) and Fort McMurray (Chemtrade Logistics Income Fund).
The open-access system is designed to scale up to more than 60,000 mt of CO2 per day capacity, or 20 million mt per annum, representing about 10 percent of Alberta’s industrial emissions.
“Pembina is proud of our commitment to all stakeholders and pleased to leverage our expertise to provide a key market solution toward a lower carbon economy with another industry leading partner,” Pembina CEO Mick Dilger said, noting the project will stimulate economic development across Alberta, provide high-value economic opportunities, lower emissions, and use existing infrastructure to decrease environmental impact.
TC Energy CEO/President François Poirier said, “It is innovative partnerships like this that excite me about our collective energy future. Industry players collaborating to leverage our existing energy infrastructure and expertise to support meaningful emission reductions and reduce our carbon footprint is a great example of how we can secure meaningful new investment opportunities, serve current and future customers and achieve operational excellence while continuing to safely and responsibly deliver the energy people need.”
Canada’s enhanced climate targets include a 45 percent reduction in greenhouse gas emissions below 2005 levels by 2030.
A coalition of leading Canadian oil sands producers also announced they were cooperating to achieve net-zero greenhouse gas emissions from their operations by 2050 as they face challenges in meeting Canada’s energy transition target, after the governments of Canada and Alberta introduced substantial relief packages for emission-reduction projects. Participants include Suncor Energy Inc., Canadian Natural Resources, Cenovus Energy, Imperial Oil Limited, and MEG Energy.
Alberta is a global leader in Carbon Capture, Utilization, and Storage (CCUS) technology, with more than $1.24 billion committed to the emissions reduction technology that is considered cost-effective and environmentally tangible.