April 8, 2009 / 6:31 PM / in 9 years

Canada consortium plans CO2 storage pilot project

CALGARY, Alberta (Reuters) - A consortium led by Enbridge Inc said on Wednesday it is ready to start a test project for injecting carbon dioxide from industrial operations into briny underground water reservoirs in Alberta.

The 38-company Alberta Saline Aquifer Project said it is moving ahead with the second of three phases, identifying the Wabamun region west of Edmonton as a prime location for a C$30 million to C$50 million ($24 million to $40 million) pilot project.

Several coal-fired power plants are located in that area of the Western Canadian province.

Pending funding and regulatory approvals, the consortium will test technologies for injecting carbon dioxide into deep saline aquifers until as late as 2015 before moving ahead with a full-scale commercial development worth as much as C$200 million.

Other members of the group include such companies as BP Plc, Atco Ltd, EnCana Corp, Penn West Energy Trust and Petro-Canada.

Costs of the pilot project will be funded partly by the Canadian government.

The consortium has also applied to the Alberta government for funding.

The province has committed C$2 billion for carbon capture and storage development as part of its aim to cut greenhouse gas emissions, while seeking to limit the financial impact on its oil sands and power generation industries.

Environmental groups such as Greenpeace have criticized the Conservative government of Premier Ed Stelmach for relying too heavily on unproven technology to solve the problem of rising emissions of gases blamed for global warming.

($1=$1.24 Canadian)

Reporting by Jeffrey Jones; editing by Peter Galloway

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