Canadian Oil Sands Producers Reach Deal With Governments for Carbon Capture Project

By Robb M. Stewart

The five biggest oil sands companies in Western Canada have reached a deal with the federal and Alberta governments to push ahead with a carbon storage project, setting the industry up to boost production and exports.

Members of the Oil Sands Alliance signed the memorandum of understanding with Ottawa and the provincial government on the heels of Alberta's submission of an application for a new West Coast oil pipeline to the federal government's Major Projects Office.

Prime Minister Mark Carney's government has tied approval for a new pipeline running from Alberta to British Columbia's coast to the Pathways carbon capture project, a vehicle to lower emissions.

The Oil Sands Alliance said the trilateral memorandum envisages a series of regulatory reforms and fiscal measures needed to lift oil sands production and get Canada's oil to new markets.

When operational, Pathways is expected to have the capacity to transport and store about 6 million metric tons of carbon dioxides captured from oil sands facilities by the mid 2030s. The CO2 will be moved to a hub in Alberta's Cold Lake area for permanent underground storage. The industry group said it will work to cut additional emissions reductions in subsequent years.

The alliance represents Canadian Natural Resources, Cenovus Energy, ConocoPhillips, Imperial Oil and Suncor Energy.

Early this month, the federal government and oil-rich Alberta agreed to support a new crude-carrying pipeline that would to carry about 1 million barrels of oil daily. The move would give Canada ownership of a second pipeline, in addition to the Trans Mountain operation that carries nearly 900,000 barrels a day. Carney at the time said Ottawa, Alberta and Canada's biggest oil producers had agreed to the terms to begin construction of a carbon-capture and storage facility.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

July 13, 2026 15:19 ET (19:19 GMT)