| CALGARY, Alberta
CALGARY, Alberta May 11 The Canadian and
Alberta governments and three energy companies said on Thursday
they will spend C$70 million ($51.14 million) to develop three
new clean technology projects, aimed at cutting costs and carbon
emissions in the country's oil sands.
Northern Alberta's vast oil sands hold the world's
third-largest crude reserves but are costly to operate and
require carbon-intensive production methods, factors that have
prompted a number of international oil majors to pull back from
the patch in recent months.
The sector is now concentrated in the hands of a smaller
pool of domestic players, who have repeatedly said technology
will be the key to remaining competitive.
Canada's Ministry of Natural Resources is contributing
C$26.2 million in funding under its previously announced Energy
Innovation Program, which has C$50 million over two years to
support the development of clean oil and gas technologies.
Provincial government-funded agency Alberta Innovates will
invest C$5.2 million, while the three companies involved -
Cenovus Energy Inc, MEG Energy Corp and
privately held Field Upgrading - will provide the additional
"Innovation like this is critical because while the
transition to a low carbon future is well underway the world
will continue to rely on fossil fuels for years to come. Our
responsibility is to make them cleaner," said Canada's Minister
for Natural Resources Jim Carr.
The funding will help take all three technology projects
towards the commercial demonstrations stage.
Field Upgrading is working on front-end engineering and
design of a 2,500 barrel per day partial upgrader, which would
process oil sands bitumen into a lower sulphur marine fuel.
Cenovus Energy and MEG Energy are testing out enhancing
production by adding solvents to the steam pumped into
underground reservoirs to melt sticky bitumen.
"We are looking at testing how these reservoirs behave when
you put a lot of solvent in there at a lower temperature, and
that will ultimately drop the steam-to-oil ratio, drop
emissions, the footprint, water usage," said Harbir Chhina,
Cenovus executive vice-president of oil sands development.
"It impacts everything and it also improves the economics of
($1 = 1.3689 Canadian dollars)
(Reporting by Nia Williams; Editing by Marguerita Choy)