NEWS RELEASE
July 13, 2000
Federal-Provincial - 429

IEA WEYBURN CO2 MONITORING PROJECT GETS FUNDING

REGINA — Storing carbon dioxide underground is a key option for helping
Canada, and the world, meet the climate change challenge.  Today, Saskatchewan
Energy and Mines Minister Eldon Lautermilch, Natural Resources Canada Minister
Ralph Goodale and PanCanadian President and Chief Executive Officer David Tuer,
announced funding for a project to monitor the capture and storage of C02 in
the Weyburn oil field.

The monitoring project builds on PanCanadian's Weyburn enhanced oil recovery project, announced in 1997, which uses an innovative technology that pumps C02 into the oil-bearing formation to force out more oil.  The C02 monitoring project, announced today, is unique because scientists and researchers can collect background information before the oil field is flooded with C02.  This will enable them to compare before and after results. It will also help them better understand the interaction and relationships between oil recovery and C02 storage.

The province will provide $2 million through its Saskatchewan Petroleum Research Incentive program and the Government of Canada will contribute $1 million for pre-injection work from its Climate Change Action Fund.  PanCanadian will support the project by contributing work and services worth approximately $12 million, as well as access to the field for sample collection. Corporations including BP Amoco, Dakota Gasification and SaskPower have confirmed their support and several other others have indicated a very strong interest in participating in the project.

"PanCanadian's C02 Enhanced Oil Recovery Project at Weyburn has given
Canada the opportunity to initiate a major monitoring project designed to study
the results of storing C02 in an oil reservoir," Lautermilch said.  "The
lessons learned from this monitoring work will set the standards for the verification of C02 storage as a technology option to economically reduce C02 emissions."

"This enhanced oil recovery project is part of the growing technology success story in Saskatchewan," Goodale said. "In the last few years, the Government of Canada has directed approximately $11.6 million into Saskatchewan
climate change projects like the Petroleum Technology Research Centre, and the
International Test Centre for C02, as well as Science and Impact Adaptation initiatives.  These projects show how Canadian ingenuity helps us respond to the global challenge of climate change."

PanCanadian President Tuer said, "PanCanadian is also pleased to announce that the Government of Canada recognizes that the emissions reductions from the Weyburn Project would be real, mesurable, and long term as defined by the Activities Implemented Jointly initiative.  The project will be registered in Canada as an Activity Implemented Jointly once it receives US approval.  The Activities Implemented Jointly initiative, under the United Nations Framework Convention on Climate Change,  recognizes international joint activities that reduce greenhouse gas emissions."

The Weyburn field is an excellent candidate reservoir for the evaluation of C02 storage because of detailed geological records and samples and almost 50 years of production history available for the field.  In addition to the geological and historical production data, PanCanadian has recently completed a major geophysical data acquisition program.  Geochemical samples will also be collected to provide baseline information in advance of the commercial flooding of the field with C02.

The monitoring project will be coordinated by the Petroleum Technology Research Centre (PTRC).  Saskatchewan researchers will include those from the University of Regina, University of Saskatchewan and the Saskatchewan Research Council and geologists from Saskatchewan Energy and Mines.  This project will be conducted under the auspices of the International Energy Agency Greenhouse Gas R&D Program, allowing the PTRC to seek funding internationally.

The project will begin immediately.  In September, C02 will be delivered to the Weyburn reservoir from the Great Plains Synfuels Plant in North Dakota.  Approximately 5,000 tonnes per day of C02 will be injected into the first phase of field development.  This phase represents approximately 25 per cent of the field designated for C02 flooding and is the focus of the monitoring project.

NRCan's news releases and backgrounders are available on the Internet at http://www.nrcan.gc.ca