Alberta commits $315m to clean up dormant oil and gas wells

Canadian oil-producing province Alberta has committed to providing a C$400m ($315.9m) to clean up oil and gas wells that are inactive as part of a programme to support oilfield services jobs.

The funding is an addition to the C$400m provided by the province last year for oil well clean-ups.

It also comes from the Covid-19 economic stimulus spending of the federal government.

The Government of Canada had earlier announced its plans to invest $1.3bn (C$1.7bn) to clean up dormant wells.

Alberta has more than 94,000 inactive wells, which has raised a concern about their environmental impact, Reuters reported.

Alberta Energy Minister Sonya Savage said: “This money is going to the service sector to create jobs, and at the same time, it has the added benefit of site remediation and environmental clean-up.”

Of the new funding, $78m (C$100m) will go towards cleaning up oil and gas wells in First Nation and Metis communities. The remaining $236m (C$300m) will be allocated to producers who had paid for well closure work in the last two years.

The inactive well rehabilitation programme is expected to generate 5,300 jobs in the province.

This month, British Columbia had also announced its plans to provide $39m (C$50m) for its inactive well clean-up programme.

Meanwhile, health authorities have granted approval to LNG Canada export project in British Columbia, following improved protection measures against Covid-19.

Last month, construction work on the site was halted by an order that applied to five key industrial projects in the province.

A joint venture between units of Shell, Petronas, PetroChina, Mitsubishi Corp, and Korea Gas Corp, LNG Canada is a major LNG export plant currently under construction in Canada.

The project cost approximately C$40bn ($31.4bn). It can produce 14 million tonnes of liquefied natural gas (LNG) a year. Prior to the Covid-19 pandemic, the project was expected to commence producing LNG in 2025.