Cenovus CEO hopeful deal can advance pivotal carbon capture project

Negotiations on the Pathways carbon capture network and an industrial carbon-pricing agreement have passed an April deadline, and Cenovus CEO Jon McKenzie said he is hopeful the parties can still reach a deal.

Negotiations between the federal government, Alberta and major oilsands producers on the Pathways carbon capture project are ongoing and passed an initial April deadline. The talks also include an agreement on industrial carbon pricing that missed an April 1 target. The Pathways plan is a proposed $16.5-billion CO2 network linking oilsands facilities to an underground storage hub near Cold Lake. Cenovus Energy chief executive Jon McKenzie said he is hopeful the parties can still reach an agreement. Current facts: - Negotiations over the Pathways carbon capture project and related agreements are now past the initial April deadline. - Agreement on industrial carbon pricing under Alberta's TIER system is also past the April 1 target; the MOU calls for a minimum effective rate of $130 per tonne. - The Pathways proposal is a proposed $16.5-billion CO2 pipeline and storage network that has not yet been greenlit by the Oil Sands Alliance. - The federal government offers an investment tax credit that could cover up to half of capital costs, and Alberta has a program providing a 12 percent grant for carbon capture developments. - The Oil Sands Alliance has said it would need roughly 75 percent of capital costs and 50–60 percent of operating costs covered by government to move forward. - Industry and government officials, including Prime Minister Mark Carney and Alberta Energy Minister Brian Jean, described ongoing talks as progressing but still incomplete. Summary: The negotiations are tied to a broader memorandum of understanding that links carbon capture development to other policy outcomes, including plans for a new West Coast pipeline. Several government support measures have been outlined, but the parties have not reached the trilateral agreement the industry is seeking. Undetermined at this time.