Alberta is spending $495 million over 15 years for a 240-kilometre pipeline that companies can hook into for collecting and storing carbon dioxide, it was announced Tuesday.
The province has signed a letter of intent with Enhance Energy Inc., which is partnering with North West Upgrading to build the pipeline, connecting the so-called industrial heartland northeast of Edmonton to oilfields near Clive, in central Alberta.
"Upon completion, it will be the first pipeline in the province that will capture large volumes of carbon dioxide from one area and transport it to another," Premier Ed Stelmach said.
"Once complete and operating at full capacity, the Alberta Carbon Trunk Line project will be able to store 14.6 million tonnes of CO2 per year. That's equivalent to removing approximately 2.6 million cars from the road.
"And it will make this the largest CCS project in the world."
The pipeline will bring CO2 to mature oilfields where it will be injected into the ground and help bring oil to the surface. Construction on the pipeline is scheduled to start in 2011, with operation commencing in 2012.
Alberta's portion of the funding is coming from its $2-billion carbon capture technology fund. The federal government is putting $63 million towards the project.
"As an engineer who has spent all of my career in enhanced oil recovery, I'm here today to say that the government's CCS fund is not only the right thing today but will set the stage to demonstrate, concretely to the world, Alberta's leadership in responsible energy development," said Susan Cole, president of Enhance Energy.
This is the third project funded by Alberta's carbon capture technology fund. In early October, the province and Ottawa announced funding for the Shell Quest project, east of Edmonton, and Project Pioneer at TransAlta's Keephills plant in Wabumun, Alta.
In both projects, CO2 emitted from the plants will be captured and injected more than 2,000 metres underground.