PTRC NEGOTIATING AQUISTORE CONTRACT WITH SASKPOWER

Tamar Hallerman
GHG Monitor
9/27/13

The Petroleum Technology Research Centre recently wrapped up construction work on Aquistore and is currently negotiating a contract to hand over the project to SaskPower for CO2 injection operations. In the meantime, the project remains ready to receive CO2 from SaskPower’s nearby $1.24 billion carbon capture retrofit at its Boundary Dam power station in southeast Saskatchewan, according to PTRC’s acting CEO Neil Wildgust. “We’re currently sorting out the contracts with SaskPower and it is very delicate at this stage,” Wildgust said in an interview this week, adding that negotiations are currently underway to determine the value of Aquistore’s assets. SaskPower spokesman Tyler Hopson confirmed that negotiations are ongoing. “The terms or details of the contract aren’t something we can talk about publicly just yet,” he said.

Wildgust said some technical issues related to the Aquistore’s infrastructure saw project costs increase by approximately $3 million, to about $25.6 million. “Installing the infrastructure, particularly the wells, was more expensive than we estimated beforehand, and there were some simple technical reasons for that,” Wildgust said. “One was the depth of the wells. Another was the cement job on the second well, which we had to do some remedial work on in order to get a full seal and approval from our regulator.” The PTRC has been working for more than a year drilling an injection and monitoring well—which at more than two miles deep is considered the deepest ever drilled in the province—roughly a mile away from Boundary Dam. Once the contract is finalized, SaskPower 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, Wildgust said.

The plan is for SaskPower to inject up to 2,000 tonnes of CO2 captured daily from the 110 MW retrofit at Boundary Dam’s Unit 3 beginning almost immediately after hot testing begins later this year. Aquistore would initially act as a stop-gap CO2 storage option for Boundary Dam, which must soon begin integrated testing and comply at all times 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. “In the long run, Aquistore acts as a buffer facility, so SaskPower shouldn’t ever have to vent CO2 at any point.” Wildgust said. He added that the utility could also utilize Aquistore for CO2 storage if there is ever a discrepancy between CO2 demand and the plant’s capture rate. “It’s not always easy to match up the demands of an oil company operating an EOR field and the rates of supply of CO2 from an industrial source,” Wildgust said.