Canada, Alberta and oil sands producers sign MOU to advance 6 Mt Pathways CCS project
The Canadian federal government, the Government of Alberta and member companies of the Oil Sands Alliance have signed a trilateral memorandum of understanding intended to advance the proposed Pathways carbon capture and storage (CCS) project, one of the largest carbon management schemes under development anywhere in the world, the Alliance announced on 13 July 2026.
The agreement sets out a policy and fiscal framework designed to support the development of the Pathways project, which, once operational, would have the capacity to transport and permanently store roughly 6 million tonnes of captured carbon dioxide per year by the mid-2030s. The CO2 would be gathered from multiple oil sands facilities and moved to a hub in the Cold Lake area of Alberta for permanent underground storage.
According to the announcement, made from Calgary, the Alliance will also work towards additional emissions reductions in subsequent years, which could be delivered by expanding the Pathways project, deploying other emissions reduction technologies, or implementing improved production practices across member operations.
The MOU goes well beyond the CCS scheme itself. It contemplates a series of regulatory reforms and fiscal measures aimed at accelerating oil sands production growth and opening access to new markets, including through a proposed West Coast Oil Pipeline. The announcement follows Alberta’s recent submission of an application for that pipeline to Canada’s Major Projects Office, and both governments have committed under the MOU to ensure their respective policy and fiscal frameworks support production growth and to streamline regulatory processes.
Oil Sands Alliance President Kendall Dilling described the framework as “positive for the oil sands industry” and said it represented a step towards enabling production growth while advancing the Pathways project. He added that member companies would continue working with both levels of government to keep Canada competitive as a destination for energy investment.
The Alliance was clear that advancing the Pathways project as outlined in the MOU remains subject to the execution of definitive agreements and to regulatory approvals, meaning a final investment decision has not yet been taken. The announcement builds on a bilateral agreement between the Alberta and Canadian governments announced on 15 May 2026 concerning implementation of their broader energy accord.
The Pathways project has long been positioned as the centrepiece of the Canadian oil sands sector’s decarbonisation strategy. The scale of the proposed storage volumes, at around 6 million tonnes per annum, would place it among the largest CCS undertakings globally, comparable to major hub projects in Europe, the Middle East and Australia. For carbon markets, the project is significant both for its potential contribution to Canada’s industrial decarbonisation targets and for its interaction with federal and provincial carbon pricing and credit systems that apply to large emitters in Alberta.
The MOU signals a continued commitment to what the parties describe as a more resilient, competitive and sustainable Canadian oil sands sector. The announcement contained extensive forward-looking statement disclaimers, reflecting the conditional nature of the commitments and the range of regulatory, technical and market factors that could affect delivery timelines and outcomes.
