December 23, 2009

Environmental engineering

Swan Hills Synfuels’ carbon capture project secures government funding

RICHARD GILBERT

staff writer

Swan Hills Synfuels became the fourth firm to sign a multi-million dollar deal with the Alberta government for carbon-capture and storage.

The government executed a letter of intent with Swan Hills Synfuels to provide a $285 million grant over 15 years to capture and sequester more than 1.3 million tonnes of CO2 per year.

“This transformative project is a whole new way to generate clean electricity, using Alberta’s vast, deep stranded coal resources,” said Swan Hills Synfuels president Douglas Shaigec. “We are using an innovative approach with proven technologies to deliver secure electricity, with a quarter of the emissions produced by coal-fired power generation today, and just over half those of natural gas-fired generation.”

The Swan Hills Synfuels project will manufacture clean synthetic gas from deep, unmineable coal seams near Swan Hills, Alberta.

“The manufacture of raw gas is done with a series of wells, which is the only infrastructure associated with this component of the project,” he said.

That end of things involves the drilling of a series of wells and injecting fluids to have the chemical conversion of coal into gas. Mother Nature does the job in the coal seam. Then a production well conveys gas from the coal seam to the surface.”

In situ coal is converted into a gas by piping saline water and pure oxygen down an injection well.

The resulting combustion, plus the steam created by it, converts the coal into gas that flows up a production well to a surface gas-separation plant.

The project will drill about 20 pairs of injection and production wells.

“The gas is taken to a plant where the CO2 is removed,” said Shaigec.

“We then have finished syngas, that is dispatched to a pipeline and then to the generator.”

This low-carbon gas will be used to fuel a new 300 MW power plant to be built near Whitecourt, Alberta.

Swan Hills Synfuels has entered into an agreement with PCL Industrial Management Inc. to construct the clean synthetic gas processing facility on a fixed price, schedule certain basis.

“We are excited to be involved in this environmentally superior project, one that has significant replication potential in Alberta and elsewhere,” said PCL CEO Paul Douglas.

“This project will be a leader among the next generation of coal-based clean energy production with carbon capture and storage.”

The power plant component of the project will be built, owned and operated by an experienced, major power generator partner, to be selected by Swan Hills Synfuels from a small number of parties who have been engaged in a competitive selection process for the last year.

The CO2 captured by the project will be used in the Swan Hills area for enhanced oil recovery, increasing conventional oil production in Alberta while permanently sequestering the CO2.

Construction is scheduled to start in 2011.

The overall cost of the project is about $1.5 billion, with a planned in-service date in 2015.

In March, SwanHills Synfuels received $8.8 million in provincial aid for its $30-million demonstration project to turn deep coal deposits into synthetic natural gas.

SwanHills is the fourth and final project to get funding under Alberta’s $2 billion carbon capture and storage plan.

Last month, the Alberta government announced it had signed a letter of intent to help fund construction of a 240-kilometre pipeline for collecting and storing CO2.

The pipeline proposed by Enhance Energy Inc. will connect the industrial heartland northeast of Edmonton to oilfields near Clive, in central Alberta.

Captured CO2 will be transported to mature oilfields where it will be injected into the ground to help bring oil to the surface.

Construction on the pipeline is scheduled to start in 2011, with operation commencing in 2012.

In October, TransAlta Utilities received $779 million from the federal and provincial governments to retrofit the Keephills 3 coal-fired plant, which is currently under construction.

The project will capture and store up to one-million tonnes of CO2 annually beginning in 2015.

The CO2 will be injected below the earth’s surface near the plants in Wabamun or the CO2 will be purified for use in enhanced oil recovery.

In the same month, the federal and provincial governments invested $865 million over the next 15 years in Shell Canada’s Quest project.

This project will sequester CO2 from the Scotford upgrader, which is also under construction.

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