By Stephen Nakrosis

Suncor Energy and ATCO on Tuesday said they have begun collaborating on early stage design and engineering for a potential clean hydrogen project near Fort Saskatchewan, Alberta.

The companies said their decision to collaborate "follows welcome messages of support from both the Government of Canada and the Government of Alberta for emission-reduction projects and infrastructure."

The project would produce over 300,000 tons per year of clean hydrogen, the companies said, adding about 65% of the produced clean hydrogen would be used in by the Suncor Edmonton Refinery, reducing refinery emissions by up to 60%.

The companies also said about 20% of the produced clean hydrogen could be used in the Alberta natural gas grid to further reduce emissions.

"With abundant natural gas resources and geology that is well suited to the utilization and permanent storage of CO, Alberta is one of the best places in the world to produce clean hydrogen," said Mark Little, Suncor's president and chief executive.

"A clean energy future is a shared national priority, and a transformational project like this one will require extraordinary collaboration with all levels of governments," said Nancy Southern, chair and chief executive for ATCO. "We look forward to working with our partners in government and with our regulators to bring this vision to life," she added.

The facility would be located at ATCO's Heartland Energy Centre near Fort Saskatchewan, the companies said, adding it "could be operational as early as 2028, provided that it has the required regulatory and fiscal support to render it economic." The companies also said a sanctioning decision is expected in 2024.

--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

05-11-21 1545ET