Shell Gets Conditional Alberta Approval for Carbon-Capture Plan

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, received conditional approval from Alberta’s energy regulator for a carbon capture and storage project planned north of Edmonton.

A panel concluded it’s in the public interest for Shell’s Quest project to move ahead, Alberta’s Energy Resources Conservation Board said in a statement posted on its website and dated yesterday. The site is suited to long-term carbon-dioxide storage, and the proposal mitigates potential risks, the board said.

Quest is designed to capture and permanently store underground more than 1 million tons of the greenhouse gas a year from the Scotford upgrader near Fort Saskatchewan, Alberta, Shell said in an e-mailed statement today. The Hague-based company said Quest is moving ahead on behalf of the Athabasca Oil Sands Project, of which Shell has a 60 percent stake and Chevron Corp. (CVX) and Marathon Oil Corp. (MRO) each control 20 percent.

“This is a really important and exciting milestone for the project and takes us one step closer to implementing the first CCS project for an oil-sands operation,” John Abbott, Shell’s executive vice president of heavy oil, said in the statement.

The decision by Alberta’s energy regulator positions the partners to make an investment decision this year on whether to proceed with the project, Shell said.

The Alberta approval has 23 conditions, mostly related to data collection, analysis and reporting, according to the energy board, and Shell has to get separate approvals for any additions to the project. The board said it will refer the application to Alberta’s environment ministry, which may add conditions.

In June 2011, Canada said Shell and its partners were in line to receive C$865 million ($847 million) in government funding over 15 years for the Quest project. The province of Alberta said it would contribute C$745 million, with Canada providing the rest.

To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net

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