Canada’s Entropy in CCS financing deal

Canadian carbon capture and storage (CCS) developer Entropy said December 30 it had struck a non-binding C$300mn (US$236mn) strategic financing arrangement with a “leading energy transition investor.”

The financing is expected to close in Q1 2022 and will provide sufficient capital for Entropy, a subsidiary of Montney producer Advantage Energy, to execute its near-term growth plans.

“We look forward to working with our new investment partner to accelerate our mission of reducing atmospheric carbon dioxide using Entropy’s low-cost, low energy-intensity CCS technology,” Entropy said. Further details of the transaction will be released when definitive agreements have been executed.

Entropy’s near-term plans include the completion of Phase 1 of a modular CCS project at its 400mn ft³/day Glacier gas plant in the Montney, which is expected to begin operations in Q2 2022 at a projected installed cost of about C$27mn. It is expected to capture 46,000 mt/year of CO₂.

Elsewhere, Entropy is working with third-party emitters under eight memoranda of understanding (MOU) and 34 non-disclosure agreements and has “high-graded” nine scoped projects leveraging Entropy’s modular CCS technology.

Entropy’s full pipeline of projects under the memoranda now exceeds 1.8mn mt/yr of potential CO₂ capture and just over C$800mn of estimated net capital expenditure. Pre-FEED, engineering and subsurface evaluations are underway for all the projects, and final investment decisions are pending for several, Entropy said, subject to financing, commercial arrangements and regulatory approvals.

The breakeven carbon pricing for Entropy’s modular CCS technology remains at about C$40/mt for capture only, or C$50/mt for capture, transport and storage. Typical all-in capital efficiency for mid-sized projects, including capture, transport and storage, is estimated at about C$400/mt/yr, with several near-term projects expected to fall below that metric, although some “first-of-their-kind” projects or installations that present more challenging exhaust conditions may exceed C$400/mt/yr, pending further research and development.

Typical operating costs are expected to be C$15/mt, with some projects approaching $20/mt, depending on the energy efficiency of the emitting facility, Entropy said.

Beyond those projects subject to MOU, Entropy is also in discussions with several other emitters in multiple industrial sectors, including cement production, reforming, chemical manufacturing and power generation. Capture potential from these potential projects exceed 3mn mt/yr.

Finally, Entropy has developed an integrated CCS (iCCS™) design under which original equipment manufacturers will integrate Entropy technology into new equipment at the factory. The iCCS™ technology, Entropy says, could eventually be available on a range of industrial equipment, including power generation, compressor engines, boilers, cement kilns, steel smelters and hydrogen reformers.

The first iCSS™ for a compressor engine is being developed in collaboration with Compass Energy Systems and is expected to be installed at the Glacier gas plant near the end of 2022 as part of a Phase 1b expansion. It is designed to capture an additional 16,000 mt/yr of CO₂.