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.
Our ‘storage as a service’ model is intended to be offered in a manner similar to custom gas processing in the O&G industry, with our emitter customers retaining exposure to the carbon credit in exchange for a fee paid to Bison. The fee will combine a service charge and a ‘flow through’ operating cost charge that will ensure customers share the benefits of increasing volumes. We expect that the fee structure will vary by term, volume and the scope of required services.
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.