Canada Growth Fund to invest up to C$1bn in Strathcona-owned CCS infrastructure | PE Hub

• Strathcona is an oil and gas producer
• The company is backed by Waterous Energy Fund
• CGF is a C$15bn arm’s-length public investment fund

Canada Growth Fund (CGF) has agreed to invest up to C$1 billion to build carbon capture and sequestration (CCS) infrastructure on Strathcona Resources’ steam-assisted gravity drainage oil sands facilities in Saskatchewan and Alberta.

Under the terms of the arrangement, Strathcona will construct, operate and own the CCS infrastructure, with 50 percent of the initial capital costs funded by CGF and 50 percent by the company. CGF’s initial commitment will be C$500 million.

Through the partnership, Strathcona will seek to capture and permanently store up to two million tons of carbon dioxide annually.

Strathcona will retain full ownership of the CCS infrastructure and associated carbon credits and will repay CGF’s investment over time out of the actual cash flows generated, based on actual captured volumes and costs.

Strathcona produces around 90,000 bbls/d of heavy oil and bitumen from its SAGD assets, with associated emissions of around three million tons of CO2 per annum. The up to $2 billion of combined capital to be deployed through the partnership is expected to capture up to two million tons of CO2 per annum, based on preliminary capital cost expectations, according to a release.

Strathcona is backed by Waterous Energy Fund.

Based in Calgary, Strathcona is an oil and gas producer.

Waterous Energy Fund is a Canadian energy-focused private equity firm.

CGF is a C$15 billion arm’s-length public investment fund intended to attract private capital to Canada’s clean economy. The fund is managed by Public Sector Pension Investment Board.