PTRC DEFENDS AQUISTORE’S BALANCE SHEET AMID MEDIA REPORTS

Tamar Hallerman
GHG Monitor
10/4/13

The Petroleum Technology Research Centre defended its accounting tied to its Aquistore CO2 storage project this week after a prominent Canadian broadcaster reported that cost overruns may have been higher than initially reported by the Regina, Saskatchewan-based organization. The PTRC is standing behind its previous projection that the storage project, now done with construction and ready to receive CO2 from the nearby Boundary Dam power station, came in at $3 million over budget, not nearly double that amount as CBC News suggested in a report earlier this week. “The installation of wells and other infrastructure at the Aquistore site cost approximately 15 percent more than predicted, owing to technical factors including the unexpected depth of the wells and complications with the cementing of the second well,” PTRC said in a statement on Aquistore’s website this week. “The safety of the wells remained an absolute priority during site works. Consequently, the project has a current net deficit of $3 million, as reported by PTRC. The Aquistore project recorded a deficit of $5.9 million during the 2012/3 financial year, but this figure does not allow for committed funding that is due for future payment.”

PTRC’s defense came days after CBC reported Oct. 1 that the project was $5.9 million overspent as of the end of March and that SaskPower, which is operating Boundary Dam, Aquistore’s CO2 source, failed to effectively oversee the cost overruns at Aquistore, citing an internal SaskPower audit. In the story, SaskPower President Robert Watson acknowledged that the utility didn’t put someone on the PTRC Aquistore Advisory Committee when it should have, resuling in the utility “not receiving timely information on the project status including the related financial condition and future obligation of the project.” PTRC said it is still in the process of finalizing the contract for transfer of Aquistore’s operational assets to SaskPower, but that the provincial utility remains “fully committed” to the Aquistore project and PTRC’s management of the subsequent research and monitoring program. SaskPower declined not comment beyond Watson’s remarks in the CBC story.

Stop-Gap Storage

Aquistore is key to the operation of the $1.24 billion retrofit of Boundary Dam, primarily as a stop-gap CO2 storage option for the project, which must soon begin integrated startup testing and comply with Canada’s federal emissions performance standard. However, the project’s contract with CO2 off-taker Cenovus will not begin until after the project goes into full commercial operations next spring, so Aquistore would act as a buffer storage facility in the meantime. Once PTRC’s contract is finalized with SaskPower, the utility will be able to inject CO2 captured from Boundary Dam’s Unit 3 for geologic sequestration into the underlying Williston Basin. PTRC, meanwhile, will settle into the role of monitoring and research lead once injection work commences.

SaskPower Signs Monitoring MOU

Meanwhile, SaskPower and Saskatchewan’s Premier Brad Wall signed a memorandum of understanding with Chugai Techno and K-Coal this week for CO2 monitoring work at Boundary Dam. Under the MOU, Chugai Technos would provide prototypes of its CO2 ground leakage monitoring system to SaskPower, which will deploy the technology at several locations on site. “The monitoring system will provide stability, cost effectiveness, higher reliability, feasibility of continuous measurement on a large scale and user accessibility, which is a benefit to support the public acceptance of carbon capture and storage technology,” SaskPower said in a press release.