Barcap invests in Canadian carbon capture

Barclays Capital, the investment banking division of Barclays PLC, has completed what it calls “a significant investment” in Enhance Energy, a Calgary-based private company specializing in CO2 enhanced oil recovery and sequestration.

Details of the deal were not disclosed. Enhance expects to be the first company to implement a large scale CO2 enhanced oil recovery project in Alberta using CO2 extracted from the region’s oil sands. Bitumen is separated from the sands, diluted and then piped to an upgrader where coking units remove the carbon.

The CO2 is then stored using geologic sequestration – or carbon capture and storage. As CO2 floods an existing reservoir, carbon is naturally sequestered within the rock. It is claimed that greater quantities of oil are recovered than would be possible with traditional primary recovery techniques.

Both sides hailed the Barclays investment as being a potential catalyst for Enhance to develop the infrastructure necessary to sequester large quantities of CO2.

"This strategy supports the Alberta government's plans to recognize value through emissions' credits and offsets, an important component of the businesses of both companies," said Mark Brown, managing director and head of commodities principal investments, Barclays Capital.

The equity investment gives Barclays a foothold within Alberta’s greenhouse gas emissions scheme which requires a 12% reduction in emissions intensity and creates credits that are tradable within the region.

“Initiatives like these may help pave the way towards a global carbon scheme," said Joe Gold, managing director and co-head of commodities, Barclays Capital.

Barclays was the first to take physical delivery of EU allowances and the first bank to take delivery of Certified Emissions Reductions (CERs).