On July 10, 2024, Canada Growth Fund Inc. ("CGF") formed a strategic partnership with Strathcona Resources Ltd. to develop carbon capture and sequestration (CCS) infrastructure on Strathcona's steam-assisted gravity drainage (SAGD) oil sands facilities in Saskatchewan and Alberta. Both parties committed up to $1 billion each, aiming to capture and store up to two million tonnes of CO2 annually. Strathcona, Canada's fifth-largest oil producer, will build, own, and operate the CCS projects, retaining carbon pricing risk, while CGF will share in project cost and capture efficiency risks. CGF's initial commitment is $500 million, with the option to increase to $1 billion.
Strathcona received CO2 injection rights from Saskatchewan in 2024, and the first commercial CCS project is expected to reach a final investment decision (FID) by mid-2025 in Saskatchewan. The partnership aims to enhance the competitiveness of Canada's carbon-intensive oil industry by demonstrating decarbonization outcomes.
Legal advisors for the transaction included Stikeman Elliott LLP and Sproule International Limited for CGF, and Blake, Cassels & Graydon LLP for Strathcona.
Stikeman Elliott’s team included Maxime Turcotte, Sophie Lamonde, Maxime Jacquin, Kurtis Reed, Rhonda Parhar, Kayla Zachariassen, Braxton Houlden, Bailey Szoke and Diana Werner (Corporate/Energy), Julie d’Avignon and Gordon Masson (Tax), Andrew Foster and Julia Demkowycz (Banking), Patrick Welsh (Environmental), and Patrick Duffy (Indigenous).