Two of the three carbon capture and storage (CCS) projects shortlisted by the Alberta government to go to the next stage of negotiations are associated with oilsands upgrading projects.

This week, the Stelmach government wound up its evaluation of CCS proposals applying for $2 billion in government funding, paring the field from 10 projects that had made it to the second stage of the competition. While none of the three short-listed proponents has yet signed a contract, the province plans to negotiate letters of intent first, with a view to signing these by the end of July with contracts by the end of this year.

The three short-listed projects include the Alberta Carbon Trunk Line-Northwest Upgrader proposal advanced by Enhance Energy Inc. and Northwest Upgrading; the Quest CCS project proposed by Shell Canada Energy, Chevron Canada Ltd. and Marathon Oil Sands L.P and the Genesee integrated gasification combined-cycle (IGCC) CCS power generation plant proposed by EPCOR Utilities Inc. and Enbridge Inc.

In the Enhance-Northwest proposal, Enhance Energy estimates that Phase 1 of the proposed 240-kilometre carbon dioxide trunk line would cost about $600 million to build, while the upgrader-refinery proposed by Northwest Upgrading will cost "significantly less than $4 billion." The upgrader's design capacity would be about 231,000 bbls per day.

A spokesman for the Quest CCS Project said the proposed, fully-integrated CCS project would capture CO2 from the Scotford upgrader and inject it about two kilometres below ground in the Alberta Industrial Heartland area northeast of Edmonton. The project would be capable of injecting up to 1.1 mega tonnes of carbon dioxide per year, although a Shell spokesman would not disclose the estimated capital cost or timeline of the project.

Steve Buick, spokesman for the proposed Genesee IGCC project, estimated the bill for that project would come to about $2 billion, generating 270 megawatts of power and roughly one million tonnes of carbon dioxide per year under current design specifications. Construction would be expected to take about three years.

While the Alberta government said it will work toward signing letters of intent by the end of this month, it also said that if that effort fails, it will review its options and may proceed to discussions with other proponents. The Alberta government has budgeted up to $100 million in the current fiscal year for engineering and design work on the successful projects.

The first round of commercial scale projects is expected to achieve annual carbon dioxide reductions by 2015 equivalent to taking approximately one-million vehicles, or about a third of all registered vehicles in the province, off of the road.