The details surrounding a contract that will move Aquistore into SaskPower's hands are coming together rapidly said Neil Wildgust, acting CEO for the Petroleum Technology Research Centre (PTRC), the current owners of the assets.
Aquistore is a third component of a major $1.24 billion carbon dioxide capture and storage project that is nearing construction conclusion south of Estevan.
Aquistore features two deep wells, the deepest ever drilled in Saskatchewan. One of the 3,400 metre deep holes will be used to store the CO2 while another will monitor the process and programs as they unfold.
The original cost to drill and complete these two wells and their accompanying equipment was estimated at $22.6 million.
That cost has since climbed to $25.6 million, mainly due to the unexpected higher drilling expenses and the extra cement required to case the monitoring well, said Wildgust.
Aquistore will be capable of storing up to one million tonnes a year of CO2 after the gas is captured at the Unit 3 generator at the Boundary Dam Power Station.
The pilot project is the world's first ever commercial sized venture into carbon capture, sequestration and re-use. It will take the carbon dioxide and other noxious gases from the newly refurbished Unit 3, which will be capable of producing as much as 110 megawatts of electrical power after all the retrofits are complete.
The carbon dioxide will then be sold and used by Cenovus, a global oil production company for enhanced oil recovery programs in the oilpatch between Estevan and Weyburn.
The project, the biggest in the PTRC's relatively short history, has been an education for all, said Wildgust.
"We will be completing the contract with SaskPower, I would expect within a few weeks," he said when speaking with The Mercury on Sept. 19.
SaskPower will then be the operator of the Aquistore unit while the PTRC will continue to conduct research programs and monitor the work and report to project partners that include Natural Resources Canada and seven other businesses or organizations.
"The research part of the project will continue through to 2017," the acting CEO added. "What happens after that is yet to be decided."
What led to the cost overruns were the unexpected deeper depths of the storage well and the monitoring well, weather related delays and the additional well completion materials, including the cement, Wildgust said.
"But there were no big glitches. There were just one or two more layers required along with the extra effort."
Wildgust came to the PTRC from a sequestration project that had been launched in the North Sea near Britain. He sees this Prairie-based project as one with huge challenges and huge opportunities as is the North Sea experiment that has completely different dynamics.
As for the increased costs, Wildgust said the project is being amortized over several years, which will take some sting out of the situation and with prices for CO2 expected to increase over the years, the additional costs will be somewhat neutralized as the cash flows improve over time.
Aquistore is considered a very important part of the overall project that includes a complete refurbishing of Boundary Dam's Unit 3 generator, including a new turbine.
The construction of the accompanying carbon and sulphur dioxide capture island next door and a $60 million smaller carbon capture research unit at the nearby Shand Power Station are expected to attract interest from global carbon capture participants anxious to test their own products and theories surrounding CO2 elimination from coal-fired power plants in a commercial setting.
The terms surrounding the purchase of the PTRC Aquistore assets by SaskPower have not been revealed as yet, pending the completion of the deal.
