Canada’s Suncor, ATCO plan blue hydrogen project
Canadian integrated oil and gas producer Suncor Energy and Alberta utility ATCO said May 11 they were in the early design and engineering stages for a project near Edmonton that would produce 300,000 mt/yr of blue hydrogen and reduce the province’s CO2 emissions by more than 2mn mt/yr.
In addition, Suncor said, the project would “significantly advance” Alberta’s hydrogen strategy, generate substantial economic activity and jobs across the province and make a sizeable contribution to Canada’s net-zero aspirations.
“With abundant natural gas resources and geology that is well suited to the utilisation and permanent storage of CO2, Alberta is one of the best places in the world to produce clean hydrogen,” Suncor CEO Mark Little said. “Suncor's 50 years of experience producing and using hydrogen in refining and upgrading operations combined with ATCO's extensive midstream gas experience creates a winning partnership to reduce our companies’ emissions and establish Canada as a global leader in clean hydrogen.”
The hydrogen production facility would be located at ATCO’s Heartland Energy Centre near Fort Saskatchewan, where the utility is already developing a hydrogen blending pilot for part of its natural gas distribution system. The area is also at the centre of Canada's first hydrogen hub, created earlier to bring together potential hydrogen production and consumption initiatives.
About 85% of the produced hydrogen would be used to meet existing energy demand, with 65% directed towards refining processes and the cogeneration of steam and electricity at Suncor’s nearby Edmonton refinery. Another 20% could be blended into Alberta’s existing natural gas distribution network, while the rest would be available for sale to other industrial, municipal and commercial transport users in the province.
Canada, like many countries, has been pursuing the development of hydrogen as part of the global energy transition, Suncor said, and while many federal and provincial policies, fiscal programmes and regulations are in place to support decarbonisation and a low-carbon fuels industry, “further regulatory certainty and fiscal support” are required before Suncor and ATCO can move to a sanctioning decision.
“For example, the availability of carbon sequestration rights, emissions reduction compliance credits, regulations to allow hydrogen blending into natural gas, and investment tax credits for carbon capture, utilisation and storage are all critical to the economic viability of the project,” Suncor said. “Suncor and ATCO are continuing to work collaboratively with the government of Alberta and the government of Canada to address these areas and create the regulatory and policy certainty and fiscal framework needed to advance this world-scale clean energy investment.”
Pending a sanctioning decision in 2024 and appropriate regulatory and fiscal support, the facility could be operational as early as 2028, using advanced technology to capture and sequester as much as 90% of the CO2 produced in the hydrogen production process. Suncor is expected to construct and operate the hydrogen production and CO2 sequestration facilities while ATCO will build and operate associated pipeline and hydrogen storage facilities.