Service Offering
Our Sequestration business is intended to serve multiple mid-Large Final Emitters (LFE), through provision of permanent verifiable CO₂ sequestration on a fee/ton basis.
By ‘verifiable’ we mean that we will seek TIER certification (or equivalent) of our process for credit serialization and have that methodology verified at least annually by a third party to be registrable on the Alberta Emissions Offset Registry if a client chose to do so.
Our ‘storage as a service’ model is intended, to the degree possible under evolving legislation, to be offered in a manner similar to custom gas processing in the O&G industry, where we do not take custody transfer of the molecules we process on behalf of our clients.
Under the existing Alberta TIER policy, CO₂ that leaves the emitter site is considered an emission (even if captured vs vented) and the Emissions offset credit is created at the point of Sequestration. The method of monetization or sharing of the value of the offset credit across the CO2 value chain between capture, transportation and sequestration, will be the subject of negotiation between the parties.
We expect that some Large Final Emitters may ultimately prefer to ‘outsource’ some or all of their CCUS delivery in a manner that would result in an Emission Offset Credit being generated, or full ‘custody transfer’ of the molecule being required. Our proposed service model can also accommodate service in that manner.
As the CCUS industry progresses we expect to offer services from the Meadowbrook Hub, potentially from our Calgary area second round application, but also to work directly with emitters on their bespoke needs for transportation and storage in Alberta locations which are not proximal to the Hubs, or in jurisdictions outside of Alberta. We would welcome the opportunity to work with emitters looking to partner on their storage solution.
We expect that a market will develop for CO₂ storage and that our service in the CCUS value chain will be priced competitively relative to what’s required to generate a risk adjusted return on the capital deployed, and against the lowest cost competitors, in a manner similar to water disposal or industrial waste disposal services. We expect that when we approach a LFE client we will need to quote a fee over a set term for each service we provide, and that a customer would have other options to compare our proposal against. Based on current cost assumptions developed for our two projects to date (both >1Mtpa) our economic modeling shows a positive project NPV at a fee of <$15/ton for permanent storage, inclusive of transportation. These figures are obviously very sensitive to distance from source to storage and the condition of the CO₂ at receipt but give a ballpark reference point. Alternatively, if pore space tenure is limited (either initially or permanently) the business may be, or become, regulated in some fashion with a tariff set. In either case, we will need to deliver efficiencies in both the capital deployed to bring the project into service, and in operating the project over its life, to maintain a profitable business.