Government and Strathcona Partner on Major $1 Billion Carbon Capture Initiative

Canada’s government-backed Canada Growth Fund (CGF) has announced a strategic partnership with Strathcona Resources to invest up to C$2 billion (USD$730 million) in carbon capture and sequestration (CCS) infrastructure for Strathcona’s oil sands facilities in Saskatchewan and Alberta. This initiative aims to significantly reduce carbon emissions from one of the country’s most critical industries.

The CGF, which began operations in 2023 with a capital pool of $15 billion for a five-year deployment, focuses on fostering a clean economy in Canada. It seeks to attract private investment by mitigating risks and promoting low-carbon projects, technologies, businesses, and supply chains. This new partnership marks CGF’s sixth investment, following notable investments in Calgary-based carbon capture startup Entropy and geothermal energy company Eavor Technologies.

Patrick Charbonneau, President & CEO of CGF Investment Management, hailed the partnership as a major step in Canada’s efforts to decarbonize the oil and gas sector, which accounts for 9% of the nation’s GDP and 31% of its emissions. He highlighted Strathcona’s role in advancing Canada’s first CCS projects in the heavy oil sector, emphasizing the sector’s economic and environmental significance.

Under this partnership, CGF and Strathcona will equally share the capital costs for developing the CCS infrastructure, with CGF initially committing $500 million and the option to increase its investment to $1 billion. Strathcona operates seven major oil sands facilities across Saskatchewan and Alberta, producing about 3 million tonnes of CO2 emissions annually. The CCS project aims to capture and permanently store up to 2 million tonnes of CO2 each year.

Strathcona will maintain full ownership of the CCS infrastructure and the associated carbon credits, while CGF will earn returns based on the actual captured volumes and costs. This investment helps Strathcona mitigate its current and future carbon tax obligations, which are a significant part of its operating costs, totaling approximately $65 million per year and expected to rise with future legislation.

Adam Waterous, Executive Chairman of Strathcona, expressed pride in leading the Canadian oil and gas sector toward reducing carbon intensity. He views this innovative partnership as a model for other producers, showcasing Canada’s potential to not only have one of the largest and most profitable oil resources but also to become a leader in low-carbon intensity through these CCS projects.