(TSX: AAV)
CALGARY,
AB, Feb. 8, 2023 /CNW/ - Entropy Inc.
("Entropy" or the "Corporation"), a subsidiary of Advantage Energy
Ltd. ("Advantage"), is pleased to provide an operational update on
its first post-combustion carbon capture and storage ("CCS")
project at Glacier, Alberta, and a
corporate update.
Glacier CCS Operations
Phase 1 of Entropy's Glacier CCS project (200,000 tonnes per
annum ("tpa") in two phases) has been running steadily since
commissioning in July 2022, and the
system performance has established a new global benchmark for
efficiency. Capture rates from the 5.3% CO2 flue gas are
generally between 90% and 95%. Runtime of the CCS equipment
has averaged 98%, not including outages related to host plant
maintenance and a series of planned reconfigurations for research
and development ("R&D"). The project has achieved a
specific reboiler duty of 2.4 GJ/tonne during extended periods of
stable operations, with even lower numbers achieved intermittently.
The compression, transportation and sequestration system is
performing as designed, permanently storing all captured CO2
volumes at predicted conditions, and Entropy is generating
compliance-based environmental performance credits.
Analysis of final project capital for Glacier CCS Phase 1
indicates that future projects are on-track to achieve a capital
cost of C$475/tonne/annum (capture
only, including inflation) for high-quality mid-sized projects, and
lower for large projects. Once the R&D phase is complete,
Entropy expects full-cycle operating costs (including capture,
compression, transportation and storage) for Glacier Phase 1 will
trend downwards from approximately C$30/tonne currently towards C$27/tonne. Based on these results, Entropy
expects Phase 2 full-cycle operating costs will drop below
C$22/tonne, and larger projects are
expected to be lower.
Entropy would like to thank the many team members who have made
the project successful, including the research and development team
from the University of Regina, the
engineering team from Entropy led by Brent
Allardyce, James Martin and
Rick Bower, the Entropy project
team, and our strategic partners at Advantage and
Brookfield Renewable.
Athabasca Leismer Project
Update
Entropy's Athabasca Leismer CCS project (440,000 tpa in two
phases) has reached "shovel-ready" status. The next step for
the project is to drill and test the local reservoir for
injectivity; however, the disposal permit has been delayed while
the province establishes regulations for the CO2 sequestration
"hub" model. This permitting delay may result in the project being
delayed by approximately three months as the end of the winter
drilling season approaches. In an effort to support
Alberta's emissions reduction
objectives, we are continuing to engage with regulators to ensure
effective local carbon storage policy, including geological
suitability, permanence, access rights and monitoring while
ensuring that emitters are not forced into constrictive, uneconomic
storage solutions.
The Athabasca Leismer project has received significant financial
support from the Alberta
government through Emission Reduction Alberta's ("ERA") Carbon
Kickstart Grant and is expected to be fully eligible for the
federal CCS investment tax credit ("ITC") and carbon
contract-for-differences ("CCFD") structure, although the federal
programs have not yet been substantially enacted.
Corporate Update
Now that Entropy's advanced technology has been proven at
Glacier, Entropy has begun expanding its team with a focus on
commercial growth in the United
States. Entropy believes the highly effective CCS
policies contained in the Inflation Reduction Act of 2022 ("IRA"),
with a government-guaranteed carbon price of US$85/tonne (~C$115/tonne), will lead to faster deployment of
CCS technology.
Entropy is pleased to announce its first memorandum of
understanding in California with
California Resources Corporation ("CRC"). The project
involves Entropy providing technology, engineering and development
expertise to decarbonize gas-fired boilers that are used in field
operations. Upon completion, the project is expected to
capture and sequester approximately 400,000 tpa.
Entropy's near-term projects include approximately 1.5 mmtpa of
post-combustion projects being developed in Canada and the
United States, including Glacier (200,000 tpa), Athabasca
Leismer (440,000 tpa), the CRC project (400,000 tpa) and an
additional Alberta project on
turbines and boilers (450,000 tpa). All of these projects
have the potential to advance to procurement and construction
during 2023 and represent first-in-kind deployment of CCS
technology. Mid-term and long-term projects remain well in
excess of 10 mmtpa.
Entropy is continuing to develop two large-scale sequestration
hubs in Alberta. At the Bow Valley Carbon Hub, Entropy and
its partner have begun investment in geologic and geophysical
evaluations to meet the near-term requirements of a joint CCS
project under development nearby. At the Grande Prairie Net
Zero Gateway, Entropy and partners are kicking off geological
evaluation work and scoping potential projects in the region.
Introducing
EntropyIQTM: Proprietary Digital Carbon Management
Software
Entropy is pleased to introduce EntropyIQTM, a
proprietary emissions tracking, processing and reporting software
platform that is a complete solution for all CCS measurement,
monitoring and verification ("MMV") data. Developed by
Entropy as a necessity for commercial CCS projects, this powerful
proprietary platform creates a digital twin of emitting facilities
to gather emissions and operating data directly from multiple
control systems. The platform calculates a full suite of
performance metrics and assembles a suite of auditable MMV reports
for export and analysis. The subscription-based, fully
operational platform is expected to satisfy the growing industry
need for data management, emissions tracking, reporting and carbon
credit generation, and is expected to complement Entropy's base
business as a CCS developer.
Organizational Updates
Entropy is pleased to announce that Trevor MacFarlane has joined the board of
directors. Mr. MacFarlane brings over 25 years of energy
infrastructure experience including areas of expertise in strategic
planning, operational risk management and technology. He
holds a Masters in Metallurgical Engineering from Queen's
University and completed advanced leadership programs, including a
QuantumShift Fellow, from the Ivy School of Business. Mr.
MacFarlane has previously held responsibility for overall corporate
strategy, leadership and vision, and business performance for
companies with an enterprise value of over $1 billion and 1,000+ employees. Mr.
MacFarlane currently sits on the Board of the Canadian Energy
Pipeline Association (CEPA) Foundation as well as an independent
director for Skipper NDT, a technology firm focused on the
performance of energy infrastructure, based in France.
Entropy is also pleased to announce that Jason Chadwick has been promoted to Chief
Commercial Officer. Jason joined Entropy in 2021 as Vice
President, Business Development and has played a critical role in
developing partnerships with emitters and the commercial frameworks
that will allow Entropy to develop projects in multiple
jurisdictions around the world.
About Entropy:
Entropy is a privately-owned company, founded by Advantage,
applying sophisticated science and engineering to develop
commercial CCS projects. Entropy entered a
strategic $300 million investment agreement with
Brookfield Renewable in 2022 to scale up deployment of Entropy's
CCS technology globally. Entropy's technology is expected to
deliver commercial profitability with an industry-leading cost
structure using proprietary modular carbon capture and storage
technology. Entropy intends to deploy this technology in the
global effort to reduce and eventually eliminate carbon emissions.
Further information is available at www.entropyinc.com.
Forward-Looking Information and
Advisory
All references in this press release are to Canadian dollars
(C$) unless otherwise indicated.
The information in this press release contains certain
forward-looking statements, including within the meaning of
applicable securities laws. These statements relate to future
events or our future intentions or performance. All statements
other than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "anticipate", "continue",
"demonstrate", "expect", "may", "can", "will", "believe", "would"
and similar expressions and include statements relating to, among
other things: the anticipated capital cost and full-cycle operating
costs of Entropy's current and future projects; the anticipated
capture rate of Entropy's Glacier CCS project; the anticipated
benefits to be derived from construction at the Glacier CCS project
and the anticipated timing thereof; the anticipated benefits of
the EntropyIQTM technology; the
anticipated capture rate of the Athabasca Leismer CCS project and
Entropy's expectations of when FID will occur; the anticipated
capture rate of the CRC project; that Entropy will continue to
engage with regulators and the anticipated benefits to be derived
therefrom; Entropy's expectations that the Athabasca Leismer CCS
project will be fully eligible for the ITC and CCFD structure; the
anticipated benefits to be derived from the IRA; the anticipated
timing of the procurement and construction of Entropy's near-term
projects and their anticipated capture rates; Entropy's
expectations that its Bow Valley Carbon Hub will be operational and
will meet the requirements of a nearby capture project; Entropy's
expectations that its technology will deliver commercial
profitability with an industry-leading cost structure using
proprietary modular carbon capture and storage technology; and that
Entropy will deploy its technology in the global effort to reduce
and eventually eliminate carbon emissions. Entropy's actual
decisions, activities, results, performance or achievement could
differ materially from those expressed in, or implied by, such
forward-looking statements and accordingly, no assurances can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur or, if any of them do, what
benefits that Entropy or Advantage will derive from them.
With respect to forward-looking statements contained in this
press release, Entropy has made assumptions regarding, but not
limited to: that Entropy's engagement with regulators will be
successful; that the long-term operating costs of Entropy's CCS
projects will not be greater than anticipated; that Entropy will
receive the regulatory approvals required in connection with the
Athabasca Leismer CCS project; that Entropy's existing engagements,
including with respect to the CRC project, will lead to completed
projects; that Entropy's CCS projects will reach FID; conditions in
general economic and financial markets; effects of regulation by
governmental agencies; current and future commodity prices and
royalty regimes; future exchange rates; royalty rates; future
operating costs; availability of skilled labor; the impact of
increasing competition; that Entropy will have sufficient cash
flow, working capital, debt or equity sources or other financial
resources required to fund its capital and operating expenditures
and requirements as needed; that Entropy's conduct and results of
operations will be consistent with expectations; that Entropy will
have the ability to develop its technology in the manner currently
contemplated; current or, where applicable, proposed assumed
industry conditions, laws and regulations will continue in effect
or as anticipated; and the anticipated benefits and results from
Entropy's technology are accurate in all material respects. Readers
are cautioned that the foregoing lists of factors are not
exhaustive.
These statements involve substantial known and unknown risks
and uncertainties, certain of which are beyond Entropy's control,
including, but not limited to: the risk that Entropy may not
realize the benefits anticipated from its CCS projects when
anticipated, or at all; the risk that MMV technology may not
satisfy the growing industry need for a fully auditable data
management system for emissions tracking, reporting and carbon
credit generation; the risk that Entropy may not receive the
regulatory approvals required in connection with the Athabasca
Leismer CCS project when anticipated, or at all; the risk that
Entropy's engagement with the regulators may not be successful; the
risk that the Athabasca Leismer CCS project may not be fully
eligible for the ITC and CCFD structure; the risk that Entropy's
engagements may not lead to completed projects; the risk that the
procurement and construction of Entropy's near-term projects may
not be completed when anticipated, or at all; the risk that
Entropy's Bow Valley Carbon Hub may not be operational or meet the
requirements of a nearby capture project when anticipated, or at
all; changes in general economic, market and business conditions;
industry conditions; actions by governmental or regulatory
authorities including increasing taxes and changes in investment or
other regulations; changes in tax laws and incentive programs;
changes in carbon tax and credit regimes; competition from other
producers; the lack of availability of qualified personnel or
management; intellectual property and patent risks; credit risk;
changes in laws and regulations including the adoption of new
environmental laws and regulations and changes in how they are
interpreted and enforced; ability to comply with current and future
environmental or other laws; stock market volatility and market
valuations; failure to achieve the anticipated benefits and results
of Entropy's technology; failure to achieve the anticipated
benefits of Entropy's relationships with third parties; ability to
obtain required approvals of regulatory authorities; and the
ability to access sufficient capital from internal and external
sources.
Management has included the above summary of assumptions and
risks related to forward-looking information above in order to
provide readers with a more complete perspective on Entropy's
future operations and such information may not be appropriate for
other purposes. Entropy's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits that Entropy or Advantage will derive
therefrom. Readers are cautioned that the foregoing lists of
factors are not exhaustive. These forward-looking statements are
made as of the date of this news release and Entropy and Advantage
disclaim any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results or otherwise, other than as required by
applicable securities laws.
This press release contains information that may be
considered a financial outlook under applicable securities laws
about Entropy's potential financial position, including, but not
limited to, the anticipated capital cost and full-cycle operating
costs of Entropy's current and future projects, all of which are
subject to numerous assumptions, risk factors, limitations and
qualifications, including those set forth in the above paragraphs.
The actual results of operations of Entropy and the resulting
financial results will vary from the amounts set forth in this
press release and such variations may be material. This information
has been provided for illustration only and with respect to future
periods are based on budgets and forecasts that are speculative and
are subject to a variety of contingencies and may not be
appropriate for other purposes. Accordingly, these estimates are
not to be relied upon as indicative of future results. Except as
required by applicable securities laws, neither Advantage nor
Entropy undertakes any obligation to update such financial outlook.
The financial outlook contained in this press release was made as
of the date of this press release and was provided for the purpose
of providing further information about Entropy's potential future
business operations. Readers are cautioned that the financial
outlook contained in this press release is not conclusive and is
subject to change.
The following abbreviations used in this press release
have the meanings set forth below:
GJ
|
gigajoule
|
mmtpa
|
million metric
tonnes per annum
|
tpa
|
tonnes per
annum
|
SOURCE Advantage Energy Ltd.