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Explore the Edmonton Region's role in solving the global climate crisis.
Welcome, too, to carbonizing today, a deep dive into
the Edmonton metro region's role in addressing the global climate crisis.
In this episode, we have your Edmonton global host, Mustafha
Sahin, here with Greg Panucio, the director of business development with Lindy Canada.
Thank you.
Welcome, Greg.
Thanks to see you. good to see you again.
Great timing to see you.
Um I've got a couple of questions.
You know, we sort of stick to a script, but then I feel like we're going to have just a really
good friendly conversation because we've known each other for about three
years since you first took your role and it's uh been a long
journey towards what will be one of the questions um
later about an F ID and Lindy. um
but let me start with I guess let's start with that.
So Lindy recently made a major announcement about its investment in
clean hydrogen production in the Edmonton region, specifically in Fort Saskatche one.
Can you provide an overview of the project that was announced
at FD, including sort of the scale, the objectives, and
the impact you expected to have on the local economy and and energy transition?
Yeah.
a couple weeks ago, Lindy made an announcement of a contract
completion with with Dow and a final investment decision on the project to
make what we think is the uh as far as we know, the world's largest
blue hydrogen facility happening right here in Edmonton, so that's very exciting.
We're going to be supplying hydrogen to DA
for their path to zero crackerer
conversion, where they're going to be switching their fuel from traditional hydrocarbon
fuels off gases natural gas over to a completely
hydrogen fuel source to to do their etane to ylene cracking projects.
And we are providing all that infrastructure and
and capability to give them that reliable supply of hydrogen to
be able to operate that furnace and make those products to generate
a lower carbon intensity, ethling products for the market.
And we're pretty excited about that.
We're going to be as part of the project investing two billion dollars,
which is, again, I think Lindy's largest
single investment on on a project.
And we're going to be seesering two million tons a year of CO2.
And we're, you know, going to be making
a big contribution to, you know, Canada's goals
and towards this, you know, journey to zero, that that we want to get to while
still maintaining, you know, the important industries and services that
that Canadians really want to have, uh, you know, to have quality
of life and and and the good products that help to make that happen.
Everybody loves numbers, everybody loves a good sound bite.
I love the two billion dollar number and and we know that's just an estimate
and we come in, you know, more or close to that, but hopefully not anymore.
um But the other thing that I think is important is,
as you mentioned, you alluded to, Dow's big announcement of
a path to zero for you know ethylene or plastics is
not possible without Lindy's contribution to that project, and
that project is a was a nine billion dollar announcement in December, right?
and largest projects of their globally I think that's important to highlight.
And when you just referen the amount of CO2 that will be captured 2.2
million tons to put that in context, that's probably the same
amount that is currently being captured in total in Alberta on an annual basis.
It's all the order of magnitude, I believe.
We've got a couple of projects that have been operating in a long time and
in fact, that history of that operation of sequestration
in Alberta is one of the key enablers that
helped both windy and doubt to make the
final decision to invest and make this projects, because it's not like,
well, certainly you're paving new new roads and and doing new things,
but having that history of that sequestration capability
and know how was within the heartland and within Alberta
really helps to give confidence in that decision
to proceed to add onto that with this with this meaningful
uh, you know, volume that we we'll be adding.
And do we have a rough timeline for how long this project will will take to reach completion?
So I think our latest estimate is 2028 first startup.
A couple of three years.
Okay.
Yes.
Okay.
Great.
So Lindy's decision to invest in clean
Yeah.
hydrogen production in the Edmonton region is a significant step.
Can you walk us through the factors that made this region the right choice for this major investment?
Well, yeah, there's a lot of things, obviously.
You have to have a great partner, a great customer,
you know, Dow.
They really trailblazers. making
a decision that without Dow making a decision that they're going
to do the path to zero project in Edmonton, then we
don't have a project ourselves to do.
And so I think that, you
know, having a having Dal take the step to say this is
our goal, this is how we're going to achieve
it and focus on Edmonson to be the place
to do that is a big cornerstone
for for enabling that project to happen.
And then you have all the other critical aspects of of
the the reasons that you want to invest in Canada, right?
So you've got a great workforce
here that knows how to execute these types of projects.
You've got a history of investments and
uh reliable investment in the region that
gives the the decision makers and the final decision
makers and the board's confidence that this is a great place to invest.
You've got a uh, you know, government in place
that's working there hardest to find avenues to facilitate
these types of investments with incentives with
bankable, um, you know, emissions, policies.
And without all those things coming together as well as a
great technology offering from the Lindy team and the Lindy engineering
and a great team on both sides, uh
between between down and Lindy to figure out how to make this happen.
Those are all all those key factors have to come together to for
the starts to align for a project to happen.
I think I want to build a little bit on what you were saying.
I think a lot of people don't realize the unique
combination of elements which exists in Alberta and in the Edmonton region
globally that have allowed this project to come together, right?
So the combination of incentives, both from the
federal government and Alberta's provincial government and the local governments and the local governments, right?
The stacked to allow that.
You know, a lot of people talk about IRA and 45Q
in the US, but Canada actually on on total,
when you put everything together is competitive, and then when you look at
the incredible geology that we have in Alberta for carbon storage,
the infrastructure for carbon transport that already exists, those are
not things to be taken lightly, and without those, this project probably doesn't happen.
Is that a fair statement?
Absolutely.
You have in Albertberta, you have the
upstream and a downstream side of the equation
to uh to complete the picture for this.
You've got the oil and gas industry in the petrochemical industry
that have been established here and successfully operating here and had companies
want to build plants for petrochemicals for refining
uh in this in this area.
And then you've got this geology that's here that helps
on the downstream side to enable this
this sequestration of CO2, which is really the fundamental
aspect of the fundamental aspect of the path to zero approach.
So you've got you've got that legacy um of existing,
large scale, big projects, with
sophisticated companies that, you know, know their business and
a uh, you know, policy in in
place that helps to motivate companies to want to actually
invest in a sustainable project, as well as
the lowest cost options for finding
a bankable solution for a sustainable a sustainable operation, right?
So CO2 capture, um and and then also around the
the costs to actually put projects on the ground and and to get equipment,
equipment in place and the right solutions in place.
And and I think, you know, you talked about bankable, you know, this
project and similar projects probably don't happen if there isn't the
stick incentive, which is a carbon tax that exists in Canada, right?
And that's something which is slightly different between the Canada and the US today, right?
That's that's a significant motivator for for corporates on one
side, but then combining that stick with the carrat which is the incentiveives
on the other side, that combination is, I think, really important.
and I think one thing that was interesting, too, is the
existing availability for sequestration, capacity, and transportation in Canada's unique.
We were just with our friends from Norway who were on this panel and they
were talking about, yeah, so you know, there's a project industrial sequestration
project in Oslo and they're basically going to have to capture the CO2. put it on trucks, truck it to the port,
transported by ship around to the other coast of Norway and then reinjected
to do an offshore sequestration project, whereas a shell
executive in the UK last week said, yeah, our project in Canada, we basically in
Alberta, we just sort of captured transported three meters by pipeline and then straight
down.ose costs factor into the overall financial
bankability or viability of projects like this, right?
That's right, that's right.
I think having the carrot in the stick working together as
well as the that low cost option to have a local
sequestration capability.
All of those things are the reason that projects are being are
happening in Alberta and in Canada.
And and let's be clear.
Lindy is not new to Alberta, right?
This is a new project, but maybe touch on Lindy's history of, you know,
in the space and providing, you know, clean air, clean oxygen and hydrogen and all these things here.
That's right.
Yeah, so Lindy's
our our corporate tagline is making the world more productive.
We understand really well how to do business in Canada and how to do our business in Canada.
And especially in Alberta, so
pivoting to over to Alberta, we've been we've been operating in Alberta for
decades and supplying, you know, the the
custom the the operators in the in the
businesses that drive
the economic engine of Alberta which then as
the economic engine of the uh, you know, the manufacturing in in Canada.
uh we've been doing we've been doing that and supporting those businesses for for decades.
So making oxygen for uh
chemical plant, making nitrogen to support, you
know, the blanketing and the purging and all those little
things that you need to do to have an operating petrochemical facility.
uh, you know, we've been doing.
We also, you know, capture CO2 here.
We've been capturing CO2 here for decades.
We then use it, so it's more on the utilization side.
uh, but you know, anytime you go into your into your grocery
store, open up the freezer and buy pizza, there's a pretty good chance that that pizza
it could have been frozen with CO2 from from Lindy
that we we'd captured in forcesaskatchewan.
And so I think we've got a long history of demonstrated
success that makes us put
Canada as a priority for growing that business and
contributing to the to Lindy's
global growth plans as a priority in Canada.
Well, and I think it's important to reiterate that point for those who don't know. is
a global operator with global operation.
So when you are looking at
bankability or financial viability of projects, you're comparing
jurisdictions to each other across the globe.
That's right.
So if it further reforforces that, you know, your familiarity
with Canada, you're familiarity with Alberta with the Edmonton region, played a part in the overall decision, right?
Any capital that gets spent at Lindy is is comes out of
a global capital pool, all of the regional business units that
operate in Lindy, United States, Canada, the UK,
Japan, China, we're all competing for the same global
pot of capital that our board of directors of approved for us to spend on new projects every year to grow our business.
And so it's our job as business development
people to bring the right projects and the right opportunities to
our board to our senior management. so that they can pick those best projects
to to add to the value of one of these stakeholders.
And clearly
the project that we've developed with now is is floated to the top as
it's our largest project we've ever, you know, decided to invest in in our history.
So building on the $2 billion dollar investment by Lindy opened
the door for future major projects and investments in the region.
How do you see this facility serviceving as a catalyst for
further clean energy investment developments, and what kinds of opportunities
do you anticipate e mmerging from this initiative?
So we know you've got a large offt tech customer.
There's going to be significant supply of clean hydrogen.
and that's just in phase one, but there's already plans for a phase two.
What other things could happen dominoes could fall by having that presence here?
Well, one obvious thing is that we've got
excess capacity at this site that will be marketing out into the
other users in the region.
So I think that helps to get potentially
other companies that are looking to take advantage of opportunities
for decarbonizing their operations or making their operations more sustainable.
They get to leverage Len's investment in this
large project to to perhaps make some make some investments on their own and utilize additional
products that we will have available as as a result of building this this unit.
This is predominantly for DA, but not everything is for Dao.
And so that's one that's one certainly could
we see Lindy Fueling stationed for the trucking sector, for example?
That would be fantastic, you know, I think we'll we'll definitely keep our eyes open for those types of things.
I think, you know, there's there's other opportunities
that could materialize from similar
scales of of what Dow is is doing because other companies
will see what's happening at Dow and are ability to execute projects.
You know, the whole we, when I say we here, I mean
the whole Alberta Industrial heartland ecosystem, right?
And they'll that'll give other companies the potential to say, you know what?
uh when I'm going and reviewing projects and evaluating
opportunities, and I apply risk metrics to
my process of evaluating and prioritizing opportunities on where I want to vest invest
I think that there's a good chance that the with
Lindy and Dow working together to do this project for the
risk that gets discountounted onto the
projects that are under evaluation, hopefully will will become smaller.
And so then that helps to then
move those projects up in the prio list for us
other folks to want to the other companies to one edge. sorry, other companies to want to execute those.
Yeah, hundred percent.
When we look at, you know, continue to develop a hydrogen ecosystem in the Edmonton region, we're talking about transportation applications.
This could help to accelerate that.
This could help to accelerate the adoption for sustainable aviation fuels
and hydrogen application and aviation, for consumer power and residential power.
and like you said, other industrials who are looking to decarponize, right?
So I think that's not to be ignored, that this will have domino effects.
That's right.
And we're also going to learn quite a bit from doing this project, obviously, right?
There's there's going to be a lot to learn and we can up apply that to the future and and
use leverage that to to help to make those projects even more efficient.
So Lindy said the forefront of clean energy technologies we touched
on nitrogen and carbon capture and oxygen.
What role do you believe hydrogen will play in helping industries
decarbonize while still driving economic growth, particularly in energy intensive sector?
So plastics is one, we've been hearing talk that this week about cement.
There's ongoing talk about steel, some of these sort of quote, unquote, hard to abate sectors.
What role do you does a project like this play in
trying to also move those types of opportunities for?
Yeah, so I guess the buzzword is the hard to abate industries.
And I think that hydrogen has a a
critical role to play in achieving targets that
a lot of companies have put out there in sustainability goals.
It's not the only path forward, but it,
I think through this project, you'll you'll see those
companiesies taking a harder look at hydrogen as a viable option.
And there's been a lot of work done already to to look at industries like steel
um and in using hydrogen and steel.
And I think that uh maybe that's another area where you could see some opportunities coming out in the future.
There's there's really um,
you know, I guess this guy's a limit.
Okay.
And which is a good time like, way back to sustainable aviation fields, right?
Oh, sustainable deviation.
I did that on purpose.
I know you.
I did.
And and I should I'd be if I didn't say that the Edward
International Airport is is a key partner in this entire entire play, you know, for you,
for us in our ecosystem, trying to drive the adoption of hydrogen in all all their applications as well.
the global demand for clean hydrogen is expected to grow rapidly in the coming years.
What lessons can other regions or industries take from
Lindy's approach in Alberta, and how can these lessons be applied
to scale clean hydrogen production in other jurisdictions for your plane?
One of the things that you can apply, one of the uh, certainly
one of the things that other companies can apply from learnings from this project
is how to appropriately incorporate the carrot and the sticks together.
I mean, there's until you actually sit down and start figuring
out how do I monetize these investment tax credits?
How do I generate the sequestration credits for the CO2?
How do I apply those to my operations most efficiently?
There's there's going to be a lot of learning that's going to happen there
and hopefully it goes both ways.
This is also going to play a significant part.
You talk about economies of scale and driving down the cost of that hydrogen, too, right?
And the lower the cost goes, the more broadly it can
be applied, or maybe less subsid would need be be be applied by government to accelerate adoption.
Not unlike EVs had to go through, right?
So I think that's an important part too, right?
That's.
I mean, the largest clean hydrogen project that Lindy's taken on, right?
That's right.
So that's a point we shouldn't forget about.
I also want you to highlight for us something that's unique about this
project, which is that it's my understanding is it's a it's a fuel substitution
project for Dow in this case, right?
Where you're trying to substitute natural gas with clean hydrogen, right?
Right.
So that's kind of a unique approach that we haven't seen a lot of and and there's probably going to be some learnings from that.
So
they're fundamentally some different options that
you have at your disposal if you want to try to reduce emissions and you are consuming fuel.
You can burn natural gas
and hydrocarbons and then try to capture the CO2 from the flu gas,
or you could try to capture the CO2 from the fuel before you burn it.
And each of those I think each of those approaches
has its own benefits and challenges and
and some will be applied in certain applications.
Others will be applied in other applications for Dao, you
know, they evaluated the options and had and they
decided that they wanted to do the fuel switching approach, which is where you take the CO2 out of the fuel before you burn it.
And one of the, you know, there there are different, there's several
benefits for taking that approach you have CO2,
when you're taking the CO2 out of a process stream in
this case, it's higher concentration, it's higher pressure,
and that makes the separation of the CO2.2 out of the
fuel stream simpler or more efficient, both from a capital and an operating expense,
you have it all in one place all that
CO2 that you're going to be using in your process, is is
in that one pipe there that you can focus on on pulling it out at that point.
But in other places, you may need to have the
the other approach where you pulled up the CO2 out after,
you know, your combustion processes and there's are options for that as well.
And and we have technology for that in projects around the world that are that are also taking that approach.
And so I think that hydrogen is certainly a big
part of the solution for the sustainability approach and in
the context of switching a fuel switching and uh and and
low carbon intensity fuel utilization,
but there are there are other customers and other applications where the
post combustion capture approach might make more sense.
Coming back to another question, we talked about growing global demand for clean hydrogen.
Do you see your operations in Alberta
as being a template for future increased production
that could actually be used to supply other markets and I'm specifically looking at California.
I'm looking yeah, export.
I'm looking at, you know, Japan, Korea, other markets that are looking.
If we're able to safely transport the hydrogen
to to the coasts, the Pacific coast of Canada, could you see this
being a hub to supply more and then exporting from Canada as well?
So I think Canada,
if I can broaden the the lens
a bits and just look at Canada as a whole, you've got Canada
is as uniquely positioned and that it's got great tideater access.
It's got great access to markets that are looking for
imports for low carbon fuel solutions,
both in the Pacific and the Atlantic.
And it's the reason those
markets that are those export markets are for companies
are looking for countries like Canada to help them
to solve those low carbon fuel problems with because they don't have the same
assets that Canada has to be able to produce these low carbon fuels.
So I think there's a lot of issues and problems that
we're going to have to figure out to to really enable that export market.
And it might, obviously the first projects that are happening
are all domestic use case scenarios.
But while they're the first, I don't think there'll be the last.
I think there will be some opportunities for exports in the future.
It's just different problems to solve that you know, we'll need to have companies taking the lead
to to drive those those
use cases home to their to their stakeholders.
And being a multinational operator like Lindy is another rather
than looking at a US versus Canada, Gulf Coast versus Alberta or eastern
Canada, do you see a scenario where there's a more integrated North American
energy supply to both Europe and Asia where players
are looking at we need a place of operation in the Gulf Coast, but we need a secondary
one in Alber or maybe one eastern Canada, because there are
shipping challenges and political challenges and logistics challenges, and that it can almost be more integrated.
Well, I think my short answer to that question is
I think as we learned anything in COVID, it's just having a diversified supply
network and supply system is critical to the world economy that we have today.
If you're relying too much on single source,
on a single approach for operation critical um
feedstocks and and uh and supplies,
then you're at risk for disruption there.
And so I think that there's a pretty good chance that
it might, I don't know what level of coordination you're going to get, but certainly, uh,
I think you'll see projects develop where there's,
you know, opportunities that for them to make sense and that a diversified
supply global supply uh system will will
probably went out in the end.
And energy security is not something we' talked about a lot three
years ago before Russia invaded Ukraine, and yet now it's becoming a real consideration because of these, right?
Justust the supply chain.
And we don't think that's going to be unique going forward, right?
And COVID was another one.
So, yeah, I hope that we can play a part and I hope that, you
know, the cooperation collaboration, you know, cross borders and whether
it's political or not, I think the companies themselves are doing the projects are the ones who are going to make that happen.
Yeah, I think Canada
is certainly the government of Canada,
the companies that operate in Canada, they are focused
on trying to find solutions to not only support and
optimize their operations domestically, but then look to outside markets to
be able to then utilize what they've learned from driving from
doing those projects to perhaps adding additional phases on new trains
that they could apply those additional capacities
to to other markets outside of domesticuses.
Yeah, and I think it's, you know, important.
I think Canada has an increasing role to play in global energy, decarbonization as well.
But we need partners, industry partners, board partners
like yourself to come and help us develop the natural resources we have here to address those markets.
I think Canada
in in Canadian history have done an excellent
job of recognizing the resources that are contained
in this great country, right, and that they are abundant and that they
are blessed. to have these resources.
And they've done a great job to figure out not only how to utilize
those resources for the betterment of Canadians in their day-to-day lives through
domestic products, but also the betterment of Canadians in their day today
lives by having products that other countries want to import from Canada
in a responsible way, so finding that balance of utilizing
Canadian resources to benefit Canadians both
in a in a domestic utilization sense,
as well as in the betterment of being able to responsibly
export a portion of those resources to to
benefit not only Canadians, but then other people around the world.
Greg, it's been a pleasure to have you.
I'm so glad you're here.
I hope we can make this almost an annual check in to monitor the
progress of this of this incredible project and and and
then celebrate together once we, you know, when we get the the ribbon cutting ceremony.
So thanks for being here as always and thanks for being such a great partner for for
Thanks for listening.
Stay tuned for our next episode of decarbonizing
today, where we meet with enhanced energy to continue exploring
how to carbonizing tomorrow starts today in the M.monton metro region.