CALGARY - Statoil Canada Ltd.'s future oilsands projects will be designed with carbon capture and storage in mind, the new president of the Norwegian company's Canadian wing says.
But the greenhouse gas-snatching technology has a long way to go before it's economically viable without government support, said Lars Christian Bacher in an interview.
"When it comes to the building of the next phases of our oilsands leases, they will be built CCS ready," said Bacher, who took up his post in September.
"But of course in order to add on that sort of a facility to capture the CO2, one definitely needs an improvement when it comes to the financial aspect of it."
The federal and Alberta governments have committed billions to support the technology, in which carbon dioxide molecules are scrubbed from emissions and then pumped underground to be stored permanently.
Supporters say the technology will help curb climate change by reducing the amount of CO2 released into the atmosphere from coal plants, oil refineries and other heavy industrial emitters.
Critics say the costs remain prohibitive and the technology has yet to be proven on a commercial scale.
Statoil, two-thirds owned by the Norwegian government, has been a global leader in carbon capture and storage, with three major projects up and running and a fourth in the works.
There are offshore carbon capture facilities at Snohvit and Sleipner in Norway, and at a gas field in Algeria. A test facility at its Mongstad refinery in Norway is scheduled to start up in 2011.
Statoil entered Alberta's oilsands in 2007, starting work on its Leismer demonstration project shortly thereafter.
Leismer will use steam-assisted gravity drainage, or SAGD, technology to draw the tar-like bitumen out of the ground. In SAGD operations, steam is pumped deep into the oil-laden earth, softening it so that the oil can flow more freely to the surface.
The project is "running according to plan," said Bacher. The plant is 73 per cent complete, and first steam is expected in October 2010.
As of today, it does not make economic sense to build a carbon capture and storage facility alongside that project. But if the technology and costs improve in the future, Statoil wants to ensure CCS infrastructure can be easily attached, Bacher said.
About a year ago, Statoil scrapped plans to build an oilsands upgrader in the Edmonton area to process heavy oilsands crude into a higher quality type of oil.
"It's still on the shelf, but of course we are following the trends and the developments in the industry from day to day," Bacher said.
For now, Statoil plans to sell the bitumen to other refiners and upgraders that can handle heavy crude.
In addition to the oilsands, Statoil has staked out a large position off Canada's East Cost. It is a partner in the Hibernia and Terra Nova fields, as well as the planned Hebron and Hibernia South Extension fields. It recently made a discovery in the Flemish Pass area, in which it has a 65 per cent working interest.
Bacher brings experience in offshore exploration to Statoil Canada. Before making the move, he led the restructuring and integration of Statoil's operations on the Norwegian continental shelf.