PAYMENT

Payment will vary, according to the scope of project deliverables contained in the contribution agreement, and will be made as expenses are incurred by the recipient to meet a schedule of deliverables. Payment will be made based on claims submitted by the recipient and reviewed and approved by Natural Resources Canada.

PARTNERSHIP OR JOINT VENTURE

The general or operating partner of a joint venture (eligible recipient) should apply for the incentive on behalf of all the owners, with appropriate disclosure of the owners and their proportionate ownership in the project. The operator will be responsible for all of the record keeping and audit requirements on behalf of the joint venture.

NRCan will ensure that the maximum payable to the eligible recipient for the duration of the program does not exceed the set maximum payable as noted in the contribution agreement.

REPAYABLE CONTRIBUTION CLAUSE

Contribution agreements under this program will serve to stimulate the growth of the entire Canadian CO2 capture and storage industry. The initiative encourages oil and gas producers to incur higher costs of production in order to stimulate large net reductions in CO2 emissions consistent with Canada's climate change objectives. However, every contribution agreement will include a repayable clause that will apply if the eligible recipient (ER), during the 2-year program, is able to capture, transport and store CO2 at $15 per tonne or less as it would fall within the range of what industry is expected to pay.

Therefore, if an ER is able to capture, transport and store CO2 at $15 per tonne or less during the 2 year period from start of injection, that portion of the incentive received by the ER will be repayable in equal monthly payments over a 2 year period.

Every ER will have to provide to Natural Resources Canada information allowing the assessment of a cost per tonne during the period of April 1, 2004 to March 31, 2006, according to a methodology to be determined by NRCan. The cost per tonne information will be subject to audit.

CONFIDENTIALITY

The federal government will exercise reasonable efforts to keep the disclosure of information confidential. However, the federal government is subject to the provisions of the Privacy Act and the Access to Information Act. Generally speaking, the federal government is prohibited from disclosing your confidential personal and business information where disclosure is reasonably likely to be harmful to your interests or would be an unreasonable invasion of your personal privacy.

Nevertheless, knowledge transfer will be a condition of approval under the program and interim and final reports must be submitted. Such provisions will not unreasonably withhold the submission of such reports, which eventually will be made available to the public. You may claim confidentiality for such reports for a period of one year from the date the report is received by the federal government. On approval of your project, you will be required to provide a waiver of confidentiality for all such reports for any time period beyond that one year period.

MONITORING

Applicants will be required to include a CO2 monitoring plan that helps establish additional confidence that injected CO2 remains stored in the reservoir for the duration of the project.

This monitoring plan can include, but is not limited to:

• Measurement of key pressure and flow variables at the injection site to ensure that reservoir parameters are not exceeded;
• Measurement of ambient CO2 fluxes, either on a continuous or periodic basis at the injection site and any other potential leak site which has been identified. These leak sites could include: particular geologic formations which have been known to leak in the past, improperly capped suspended or abandoned wells, capped wells that are older than 50 years, etc.

In addition, project proponents will allow researchers to perform monitoring and storage research activities, as may be agreed between the project proponent and the Government of Canada. This agreement would be initiated under separate cover and would respect project proponents' desires with respect to commercially confidential information.

In all cases, a rationale for selection of a particular methodology and a complete detailing of the estimation methodology should be provided in the proponent's application package.