Canada Growth Fund Announces up to $2 billion Carbon Capture and Sequestration Partnership with Strathcona Resources
Strathcona is the fifth largest oil producer in
"This partnership is a breakthrough in
"Strathcona is proud to be leading the Canadian oil and gas sector towards reducing our carbon intensity, prudently and profitably," added
Strathcona's oil sands facilities in
In keeping with its mandate, CGF is focused on enabling substantial, cost-efficient emission reductions and supporting the commercial-scale operations of technologies crucial to decarbonizing
A positive FID on
Transaction Highlights:
-
$500 million initial financing by CGF to build CCS infrastructure on Strathcona's SAGD assets. - CCS projects will be funded 50% by CGF and 50% by Strathcona.
- Strathcona will build, own and operate all CCS projects and receive all investment tax credits.
- Strathcona's share of capital costs is expected to be primarily funded through the federal CCS investment tax credit and other grants.
- First CCS project FID targeted by mid 2025 and is expected to be in
Saskatchewan . - CGF will earn a targeted return over time with the annual cash flows generated by each CCS project based on actual captured volumes, actual operating costs, and a fixed carbon price guaranteed by Strathcona,
- CGF will have an targeted 10-year payback period on each project. Actual payback period will depend on actual performance of the project(s).
- CGF has information and audit rights related to the
SAGD CCS Partnership and will have oversight rights on construction and operations of the CCS projects.
About CGF
CGF is a
CGF makes strategic investments to help
- reduce emissions and achieve
Canada's climate targets; - accelerate the deployment of key technologies, such as low-carbon hydrogen and CCS;
- scale-up companies that will create jobs, drive productivity and clean growth across new and traditional sectors of
Canada's industrial base; - encourage the retention of intellectual property in
Canada ; and - capitalize on
Canada's abundance of natural resources and strengthen critical supply chains to secureCanada's future economic and environmental well-being.
Further information on CGF's mandate, strategic objectives, investment selection criteria, scope of investment activities, and range of investment instruments can be found on www.cgf-fcc.ca.
About
In Budget 2023, the
Advisors
Forward-Looking Information
Certain statements contained in this News Release constitute forward-looking statements or forward-looking information (collectively, "forward-looking information"). Forward-looking information relates to future events or future performance. All information other than statements of historical fact is forward-looking information. The use of any of the words "believe", "estimate", "anticipate", "expect", "plan", "predict", "outlook", "target", "project", "plan", "may", "could", "will", "shall", "should", "intend", "potential" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the generality of the foregoing, this press release contains forward-looking information pertaining to the following: the arrangement between Strathcona and CGF, including the amount of funding to be contributed by each party; the construction, operation and funding of the CCS projects; CGF's expected investment in the CCS projects and Strathcona's repayment of the CGF's investment in the
While CGF believes the expectations and material factors and assumptions reflected in the forward-looking information contained herein are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. Forward-looking information is not a guarantee of future performance and actual results or events could differ materially from the expectations of CGF expressed in or implied by such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information is subject to a number of known and unknown risks and uncertainties, including, without limitation: the risk that the SAGD CCS Initiative may not provide the anticipated benefits to CGF and Strathcona; the risk that CGF may not meet its funding obligations under the terms of the arrangement; the risk that the CCS projects may not reduce emissions attributable to Strathcona's operations; the risk that the CCS investment tax credit and other grants may not be available or available on the terms expected; changes in general economic, market and business conditions; industry conditions; actions by governmental or regulatory authorities including increasing taxes, amending or revoking permits and changes in investment or other regulations; changes in tax laws and incentive programs; changes in carbon tax and credit regimes; competition; the lack of availability of qualified personnel or management; credit risk; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; ability to comply with current and future environmental or other laws; stock market volatility and market valuations; ability to obtain required approvals of regulatory authorities; and ability to access sufficient capital from internal and external sources.
Readers are cautioned that events or circumstances could cause actual results to differ materially from those predicted, forecasted, or projected. Statements, including forward-looking information, are made as of the date of this News Release and CGF does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained in this News Release is expressly qualified by this cautionary statement.
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