Suncor Energy Inc. (SU - Free Report) recently announced that it will install two cogeneration units at its Oil Sands Base Plant by replacing its coke-fired boilers. The deal worth C$1.4 billion is an initiative to reduce greenhouse gas (GHG) emissions by 25%.
This new installation will generate steam for Suncor Energy’s bitumen extraction and operational upgrades.
Further, the natural gas-fuelled cogeneration units will produce 800 megawatts of power, which will be transmitted to the electricity grid in Alberta. Notably, the power to be generated is equivalent to 8% of the current electricity requirement in the Western Canadian province.
Currently, Suncor is transmitting 450 megawatts using its existing cogeneration plants to Alberta, per Reuters. The source added that this new Base Plant development will help the company triple this power generation.
Importantly, the low-carbon power to be generated by this Canadian company is equivalent to removing 550,000 cars from the road.
Along with GHG emissions, the cogeneration units are envisaged to lower sulphur dioxide and nitrogen oxide emissions from its base plant by 45% and 15%, respectively.
The requirement of flue gas desulphurization (FGD) unit for controlling sulphur emissions will also no longer persist. As a result, there will be 20% reduction in the water volume, which the company extracts from the Athabasca River.
The project, planned to come online in the second half of 2023, will help the company reach its target of increasing C$2 billion in free fund flow.
This Calgary-based entity has pledged to cut its emission concentration by almost 30% in the coming 10 years. Cogeneration being one of the most energy-efficient forms of hydrocarbon-based power generation will play a significant role in Canada’s climate ambitions.
Zacks Rank & Key Picks
Suncor Energy carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include BP Midstream Partners (BPMP - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and World Fuel Services Corporation (INT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BP Midstream’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters.
Dril-Quip earnings beat the Zacks Consensus Estimate in three of the previous four quarters.
World Fuel Services earnings beat the Zacks Consensus Estimate in all the last four quarters.
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