From: Reuters
Published March 12, 2008 03:28 AM

StatoilHydro says ready for new Canadian CO2 rules

OSLO (Reuters) - Norwegian oil and gas group StatoilHydro said it was ready to work with new Canadian rules on carbon dioxide emissions at its planned oil sands venture in Alberta.

"We have known for a long time that something on CO2 would come from the Canadian authorities and we think we are well prepared," spokeswoman Kjersti Morstoel said on Wednesday.

She said StatoilHydro, which last year bought 257,000 acres of oil sand leases in Alberta's Athabasca region for about $2 billion, still needed to evaluate the details in the new rules.

According to new regulations, oil sands facilities that go into operation starting from 2012 will be required to capture and store the bulk of their emissions of carbon dioxide, which is blamed for climate change.

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Existing facilities -- which process the tar-like bitumen from Alberta's massive oil sands into refinery-ready light crude -- and those that start operating before the end of 2011 will have to reduce emissions using cleaner fuels according to the rules that will be finalized next year.

StatoilHydro is due to have its 10,000 barrels of bitumen per day demonstration project up in late 2009 or early 2010.

Its oil sands portfolio is expected to yield more than 200,000 barrels per day by the end of the next decade, if it follows through with an upgrader facility.

"According to our project, we have not yet decided on the upgrader. But the upgrader is designed to be carbon capture ready from day one," Morstoel said, adding that it was not yet clear when StatoilHydro would make a decision on the upgrader.

(Reporting by Wojciech Moskwa; Editing by Mike Elliott)

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