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Energy and Resources Suncor to install emission-reducing equipment at oil sands plant for $1.4-billion

Suncor Energy says it has started the regulatory process on replacing aging boilers at its oilsands Base Plant with two cogeneration units to lower costs and carbon output. The company says the cogeneration units, which allows industries to use both the electricity and heat created in power generation, will replace boilers that currently use petroleum coke as fuel.

The Globe and Mail

Suncor Energy Inc., Canada’s second-largest oil sands producer, will invest $1.4-billion to install two cogeneration units at its Oil Sands Base Plant, reducing greenhouse gas emissions by 25 per cent, the company said on Monday.

The natural gas-fuelled co-generation units will replace coke-fired boilers and provide steam generation for Suncor’s bitumen extraction and upgrading operations, as well as 800 megawatts of power to be transmitted to Alberta’s electricity grid.

The Base Plant in northern Alberta is Suncor’s largest oil sands project, producing 357,000 barrels a day of synthetic crude from its two upgraders.

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“We’re trying to reduce the greenhouse gas emissions in every barrel we produce and this is a big step forward,” Suncor chief executive officer Mark Little said in a phone interview.

Suncor already transmits about 450 megawatts to the Alberta grid from its existing co-generation units and the Base Plant project will nearly triple that contribution, Little said.

The project will provide low-carbon power equivalent to displacing 550,000 cars from the road, Suncor said in a statement.

Suncor is aiming for a $2-billion increase in free funds flow by 2023 and Mr. Little said the co-generation project would generate slightly more than 10 per cent of that through lowering oil sands operating costs and sustaining capital costs.

It will also cut Base Plant sulfur dioxide emissions by 45 per cent and nitrogen oxide emissions by 15 per cent.

Co-generation uses natural gas to produce both industrial steam and electricity. A number of other oil sands producers including Cenovus Energy Inc. and MEG Energy Corp also use it to power their operations.

(US$1 = 1.3161 Canadian dollars)

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