VANCOUVER, British Columbia (Reuters) - Spectra Energy Corp. will study building a large-scale carbon sequestration facility at its natural gas plant in northeastern British Columbia, the company and the British Columbia provincial government said on Monday.
The provincial government has agreed to pay C$3.4 million ($3.4 million) to look at the geological and economic feasibility of permanently storing captured carbon dioxide and hydrogen sulfide in a depleted natural gas reservoir two kilometers (1.3 miles) underground.
Provincial officials put the total price of the project at C$12.1 million.
Spectra said the reservoir in Fort Nelson has the potential to store about one million metric tons of carbon dioxide produced by industrial emitters annually, which would be the equivalent of taking 250,000 cars off the highway.
The Western Canadian province is looking to carbon sequestration to help meet its goal of reducing emissions of greenhouse gases linked to global warming by 33 percent by 2020.
Fort Nelson, with a population of about 4,400, is in the heart of a major natural gas production area.
The carbon dioxide would be injected into saltwater-filled geological formations or depleted natural gas pools. It can only be done in sedimentary basins where rocks have enough pore space to handle the volume of carbon dioxide to be injected.
Reporting Allan Dowd; Editing by Peter Galloway