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Two Calgary-based energy companies plan to develop a new carbon transportation and sequestration system in Alberta, which they say will form the backbone of Alberta’s carbon capture utilization and storage industry.

Carbon capture, utilization and storage is pegged to play a key role in Canada’s goal of net-zero greenhouse gas emissions by 2050. Pembina Pipeline Corp . and TC Energy Corp . say their project will be able to transport more than 20 million tonnes of carbon dioxide each year when complete, and are hoping to have the first phase up and running by 2025.

The companies plan to retrofit existing, underutilized pipelines and build new systems to connect the province’s largest sources of industrial emissions to a carbon storage location northeast of Redwater, Alta. They call their project Alberta Carbon Grid.

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Mick Dilger, chief executive officer of Pembina, said Thursday the partners won’t estimate an overall cost until more engineering studies are completed. However, using new pipeline, the project would run into the multibillions of dollars. The Carbon Grid’s concept of repurposing underused pipelines will cut the cost in half, he said.

The industry is already well-versed in dealing with the pipeline companies for oil and gas transportation, which makes the project familiar from a commercial standpoint, he said. Plus, both companies already have significant experience with sequestration, underground cavern storage, and acid gas and water disposal.

The Carbon Grid will comprise multiple segments across Alberta – a northern section in Fort McMurray to connect to the oil sands, a central leg for Alberta’s Industrial Heartland outside Edmonton, and a portion in the southwest to capture CO2 from power generation facilities in the region.

Other industrial operations, such as petrochemical and fertilizer plants, will also have access to the system. The open-access grid is being designed with the ability to scale up to more than 60,000 tonnes a day of capacity, representing about 10 per cent of Alberta’s industrial emissions.

“So, you can be Suncor or you could be Joe’s Oil and Gas and you’re going to have access to this system. It’s open access – many receipt points, many delivery points,” Mr. Dilger said in an interview.

“We’re going to make money on this, but we’re not hanging our hat on this thing just to make money. There’s a bigger purpose here.”

Between the scale of the project and repurposing existing pipelines, the companies say tolls on the new system will be less than the current price of carbon in Alberta, making its use more attractive for prospective customers and helping the grid’s long-term competitive viability.

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Beyond Pembina and TC Energy assets, the partners will discuss getting other companies, such as Enbridge Inc., to consider contributing pipelines to the project, Mr. Dilger said.

“I think the bigger challenge is actually the capture [rather] than the transportation and sequestration. But we’ve got a lot of smart people in the province and the capture technology exists. We just need to find a way to do it for less cost and we’ll need help from the federal government on the capture side,” he said.

He said that’s why the project fits with the aims of the largest oil sands producers, which announced this month they have formed a partnership to achieve net-zero greenhouse gases from their operations by 2050.

The province is already home to a CO2 pipeline – the Alberta Carbon Trunk Line – which captures industrial emissions and delivers them to mature oil and gas reservoirs for use in enhanced oil recovery and permanent storage.

For Pembina, the project is the latest in a flurry of corporate moves that could see it vastly expand. It has launched an $8.3-billion white-knight takeover offer for Inter Pipeline Ltd. Inter’s board has recommended shareholders accept the offer over a hostile bid from Brookfield Infrastructure Partners LP. It has joined with Western Indigenous Pipeline Group to plan an offer for the Trans Mountain oil pipeline, which is in the midst of a $12.6-billion expansion.

In addition, Pembina has announced it is buying a 50-per-cent stake in the proposed Cedar LNG project on the B.C. coast, becoming a partner with the Haisla Nation.

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