* First oil sands carbon capture project
* Quest project to bury 1 mln tonnes of CO2 per year
* Construction complete by late 2015


Sept 5 (Reuters) - Royal Dutch Shell Plc said on
Wednesday it has given final approval for its planned C$1.35
billion ($1.36 billion) Quest carbon capture and storage project
in order to cut carbon-dioxide emissions at its 255,000 barrel
per day Scotford oil sands upgrader near Edmonton, Alberta, by
more than a third.
The company said the facility will capture more than 1
million tonnes of carbon dioxide annually, 35 percent of the
upgraders emissions, and inject it two kilometers (1.2 miles)
underground.
The project would be the first of its kind for the oil
sands, the world's third-largest crude reserve behind Venezuela
and Saudi Arabia.
Oil sands projects, particularly upgraders that convert
bitumen stripped from the sands into synthetic crude oil, emit
millions of tonnes of carbon dioxide annually and carbon-capture
projects are seen as a way to improve their environmental
performance.
Shell said the Quest project will the first that it designs,
builds and operates and will be at the center of the company's
carbon-capture and storage research for its global operations.
"We are helping to advance CCS technology on a number of
fronts around the world, but Quest will be our flagship
project," Peter Voser, Shell's chief executive, said in a
statement.
The governments of Alberta and Canada are contributing C$865
million to Quest. In return, the company will share its
intellectual property and data from the project. The federal
government is looking to carbon capture technology to help it
target of cutting CO2 emissions to 17 percent below 2005 levels
by 2020.
"Our government is committed to exploring and demonstrating
CCS technology as a critical opportunity to reduce greenhouse
gas emissions and protect our environment," Federal Energy
Minister Joe Oliver said at a press conference.
However critics say the funding could be put to better use.
"These are resources that could be much better spent in
promoting renewable energy and energy efficiency," said Keith
Stewart, the climate and energy campaign coordinator for
Greenpeace Canada. "We'd rather see this going towards promoting
cars that use less gas, cost consumers less money, or a source
of power like wind or solar ... The kind of things that are
worthy of public support and would actually reduce greenhouse
gas emissions."
The Scotford upgrader is part of the Athabasca Oil Sands
Project. Shell has a 60 percent stake in the Athabasca Oil Sands
Project, which includes mining operations and the upgrader.
Marathon Oil Corp and Chevron Corp each have a
20 percent share.

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