Verification Report Bantry AGI

+1 (604) 353-0264 • www.brightspot.co • [email protected]

AltaGas Processing Partnership

AltaGas Bantry Acid Gas Injection Project Verification Report

March 9, 2017

This page intentionally blank


Statement of Verification

March 9, 2017

Alberta Environment and Parks

12th Floor, Baker Centre

10025 – 106 Street�

Edmonton, Alberta T5J 1G4

Introduction

AltaGas Processing Partnership (“The Responsible Party”) engaged Brightspot Climate Inc. (Brightspot

Climate) to review the greenhouse gas (GHG) emission reduction and removal project, AltaGas Bantry

Acid Gas Injection Project (“The Project”). The Project was developed in accordance with the

Quantification Protocol for Acid Gas Injection, Version 1, May 2008 (“The Protocol”).

The Responsible Party’s “GHG Assertion” consists of the Offset Project Plan, Offset Project Report and

supporting documentation. The GHG Assertion covers the reporting period January 1, 2016 –

December 31, 2016 and states an emission reduction and removal claim of 42,407 tonnes CO2e over

this period.

The emission reduction and removal claim consists exclusively of 2016 vintage credits.

The Responsible Party is responsible for the preparation and presentation of the information within the

GHG Assertion. Our responsibility as the verifier is to express an opinion as to whether the GHG

Assertion is materially correct, in accordance with approved Protocol, the Specified Gas Emitters

Regulation (Alta. Reg.139, 2007) (the “Regulation”), and the Alberta Environment and Parks Technical

Guidance for Offset Project Developers, Version 4.0, February 2014.

Scope

We completed our review in accordance with the ISO 14064 Part 3: Greenhouse Gases: Specification

with Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such,

we planned and performed our work to provide positive, but not absolute assurance with respect to the

GHG Assertion.

The verification procedures that were performed through the course of the verification were developed

based on the results of a risk assessment that was completed during the verification planning stage.

These verification procedures are described in the Verification Plan. Certain verification procedures

included data sampling. The sampling type, sample size and the justification for the planned sampling

type and size are detailed in a Sampling Plan, which is included in the Verification Plan.

Conclusion

I believe our work provides a reasonable basis for my conclusion.

There are no unresolved discrepancies detected in the GHG Assertion.

Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is

materially correct and presented fairly in accordance with the relevant criteria.

Sincerely,

Aaron Schroeder, P.Eng.

Brightspot Climate Inc.

Vancouver, British Columbia

Brightspot Climate Inc. – Verification Report

AltaGas Processing Partnership – AltaGas Bantry Acid Gas Injection Project

1

Verification Summary

This Verification Report follows the standardized format prescribed in the Alberta Environment and

Parks guidance document, Section 5.2.1

Table 1: Verification Summary

Project Information:

Project Name: AltaGas Bantry Acid Gas Injection

Project

Geographic Boundary: AltaGas Bantry Processing Plant located

near Tilley, Alberta

LSD: 1/4-33-17-12 W4M (Processing Plant)

02-13-33-17 12 W4 (Injection Well)

Project Contact Information:

Stefan Dimic,

Commercial Representative, AltaGas Processing Partnership

1700, 355 4th Avenue SW Calgary, AB T2P 0J1

(p) 403-691-7031

(f) 403 691-7000

(e) [email protected]

(w) www.altagas.ca

Alberta Offset System Criteria

Evaluated (see Verification

Activities):

The project must meet the eligibility criteria stated in Section 7 of the Specified Gas Emitters Regulation (SGER). In order to qualify, emission reductions must:

• Occur in Alberta;

• Result from actions not otherwise required by law and be

beyond business as usual and sector common practices;

• Result from actions taken on or after January 1, 2002;

• Occur on or after January 1, 2002;

• Be real, demonstrable, quantifiable and verifiable;

• Have clearly established ownership; and

• Be counted once for compliance purposes.

Verification Objectives:

• issue a verification statement on whether the GHG assertion is without material discrepancy;

• issue a verification report that provides details of the verification activities; and

• complete the “confirmations” activities defined in the Alberta Environment and Parks Verification Guidance Document, Section 5.4, Table 26.

1 Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January 2013. Alberta Environment and Parks.



2

Verification Summary: There are no unresolved discrepancies detected in the GHG

Assertion.

Verification Team Members:

Lead Verifier: Aaron Schroeder, P.Eng.

Associate Verifier: Will Grundling, MSc.

Peer Reviewer: Nathan Muegge, P.Eng. Project Start Date: January 12, 2009

Credit Start Date: January 12, 2009.

Credit Period: January 12, 2009 – December 31, 2016

Offset Project Report Date: March 8, 2017

Expected Lifetime of Project: Acid gas injection (AGI) is expected to permanently replace the

Xergy SRU and tail gas incinerator.

Actual Emissions Reductions

Achieved: 2016: 42,407 tonnes CO2e

Other Environmental Attributes: The Project does not have any other environmental attributes,

credits or benefits.

Ownership:

AltaGas Processing Partnership (“The Proponent”) is the sole owner

of the Bantry Sour Gas Processing Plant (“The Plant”) and

maintains 100% ownership of the environmental attributes created

by the Project.

Project Registration:

Brightspot Climate is not aware of any other systems or registries

where the Project has been registered. The Responsible Party has

not disclosed registration of the Project on any other system or

registry.

Verification Report Date: March 9, 2017



3

Introduction

This document contains the following six sections:

1. Verification Summary: as shown in Table 1 above.

2. Verification Report Introduction: this section defines the parties associated with this verification, a description of the project and the verification objective, scope and criteria applied to the verification. A list of the Responsible Party’s documents reviewed through the course of the verification is also provided in this section.

3. Verification Schedule: lists important verification activities and dates.

4. Verification Findings: this section includes a discussion of the results of each verification procedure and each qualitative and quantitative discrepancy identified as well as a summary of the total materiality of discrepancies.

5. Confirmations: a table provides details of the “confirmation” activities completed by the verifier, as required by Alberta Environment and Parks2.

6. Statements: Verification team biographies, Statement of Verification, Conflict of Interest statement and Statement of Qualifications.

The final Verification Plan is a separate document that was developed at the outset of the verification.

The Verification Plan includes a description of the final verification strategy, verification procedures and

sampling that was applied to the verification. The final Verification Plan is appended to this report.

Parties Associated with the Verification

ISO 14064-3 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

The Alberta Environment and Parks Technical Guidance Document extends this definition to

include the information included in the Baseline Emissions Inventory Application and the

Specified Gas Compliance Report.

GHG Project: activity or activities that alter the conditions identified in the baseline scenario,

which cause GHG emission reductions or GHG removal enhancements.

The GHG project that is the subject of this verification is the AltaGas Bantry Acid Gas Injection

Project, which will be referred to throughout this document as “the Project.”

ISO 14064-3 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is AltaGas Processing Partnership.

2 See Section 5.4 of Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January 2013. Alberta Environment and Parks.



4

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is Alberta Environment and Parks.

Verifier: competent and independent person, or persons, with responsibility for performing and

reporting on the verification process.

The verifier for this verification is Brightspot Climate Inc. The members of the verification team

are provided in section 3 of this document.

Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely

independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including requiring appropriate training for all

verification team members, to ensure the application of these principles for this verification.

A final “Conflict of Interests Checklist” is included in Section 6 of this report.

Project Description

Blue Source Canada (Blue Source) has been working with AltaGas Processing Partnership (AltaGas) to

quantify and report the greenhouse gas emission reductions associated with acid gas injection at the

Bantry Acid Gas plant.

Blue Source and AltaGas have developed an Offset Project Plan (OPP) for each of the Projects, which

describes the emission reduction technologies that have been implemented. The OPP describes the

Projects, the methodologies applied to quantify the emission reduction and the processes for

measuring and monitoring GHG information.

The quantification of the emission reduction is the difference between emissions in the baseline and

project conditions.

A dynamic baseline is applied to quantify baseline emissions, that is, measured quantities during the

reporting period are used to estimate baseline emissions for the same period. This approach conforms

with the protocol approved by Alberta Environment and Parks. The baseline emission sources include

fuel extraction and processing (emission source “B9” in the OPP) and incineration (emission source

“B6” in the OPP).

Emission sources during the project period include fuel extraction and processing (emission source

“P12” in the OPP), acid gas dehydration and compression (emission source “P6” in the OPP) and upset

flaring (emission source “P8” in the OPP).

The emission reduction achieved between January 1, 2016 and December 31, 2016 (known as the

“reporting period”) will be reported and verified within the scope of this verification.



5

Verification Details

Verification Parameters

Table 2: Verification Objectives, Criteria and Scope

Verification Objectives • issue a verification statement on whether the GHG assertion is without material discrepancy;

• issue a verification report that provides details of the verification activities; and

• complete the “confirmations” activities defined in the Alberta Environment and Parks Verification Guidance Document, Section 5.4, Table 26.

Criteria • Climate Change and Emissions Management Act

• Specified Gas Emitters Regulation (Alta. Reg.139, 2007)

• Technical Guidance for Offset Project Developers, Version 4.0, February 2013

• Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January 2013

• Quantification Protocol for Acid Gas Injection, Version 1, May 2008

Scope Project Name: AltaGas Bantry Acid Gas Injection

Project





Physical Operations: Capture and permanent sequestration of

the acid gas stream to reduce the quantity

of CO2 released to the atmosphere

Project condition includes compression,

transportation, and injection of acid gas

Baseline processes include flaring

Emission Sources: Natural Gas Combustion, Extraction and

Processing

Electricity Consumption

IPCC GHGs Emitted: CO2, CH4 and N2O

Reporting Period: January 1, 2016 – December 31, 2016



6

Documents Reviewed

The following Responsible Party’s documents were reviewed through the course of the verification (only

the most recent version is listed in instances where multiple versions were reviewed):

• AltaGas Bantry GHG Calculator_2016_v5-2017-3-6.xlsx

• Bantry_AGI_FINAL_OPR_2016_v2_Ma-8-2017.pdf

• OPP_Bantry 2012.pdf

• Altagas_Bantry_multipleSamplePoints_2016-12-27.pdf

• Plant 2 Acid Gas 04-33-017-12-W4 – 2016-10-07 – GAS.pdf

• Plant 2 Sales used for Fuel Gas 04-33-017-12-W4 – 2016-10-07 – GAS (3).pdf

• Meter calibration reports (various)

• Bantry Meter Summary 2016 Volumes.xlsx

• Petrinex Volumetric For Bantry.pdf

• ESC2483 Blue Source AltaGasBantry 2016 DRAFT.pdf (SULSIM report)

Site Visit

The site visit was conducted on February 10, 2017 by Aaron Schroeder. The site visit included

observation of the emission sources, metering and data systems used for recording metered quantities.

The following Responsible Party staff were interviewed regarding various aspects of the Project.

• Terry Lait, Operator - AltaGas

• Rob Petersen, Operator - AltaGas

• Kelsey Lank, Carbon Solution Analyst – Blue Source Canada

• Tooraj Moulai, Carbon Solution Analyst – Blue Source Canada

Further details of the verification activities that were conducted on site, including observations and

inquiries, are provided in Table 4 of this report.

Verification Schedule

The verification was completed according to the schedule established between the Responsible Party

and the Verifier in the Verification Plan. The verification reached important milestones on the following

dates:

• Verification Kickoff Meeting: January 23, 2017

• Draft Verification Plan: February 10, 2017

• Site Visit: February 10, 2017

• Final GHG Assertion March 7, 2017

• Draft Verification Report : March 8, 2017

• Peer Review March 8, 2017

• Final Verification Report March 9, 2017



7

Verification Findings

The results of the verification risk assessment provided the basis for the verification procedures. Table 3, below, provides a summary of the

verification procedures where discrepancies were detected. Table 4, which follows, provides a description of every verification procedure that

was completed.

Table 3: Verification Findings Summary

Activity Data / Inventory

Component Description Discrepancy Description

Discrepancy

Type

Discrepancy

Magnitude

There are no unresolved discrepancies detected in the GHG Assertion.



8

Table 4: Findings of Verification Procedures

Activity Data / Inventory Component Description

Verification Procedures Verification Findings

PROTOCOL APPLICABILITY REQUIREMENTS

1. The project results from

emissions that otherwise

would have been released

to the atmosphere.

Substantive test: Review project schematics

and interview facility operators to determine

if baseline scenario described in the Offset

Project Plan is applicable.

The baseline condition for the Project was the continued use of the

Xergy SRU that had been in operation at the site since 2002.

Although this system was challenging to operate, it was achieving

the required sulphur recovery. This baseline scenario meets the

requirements of the Protocol.

No discrepancies detected.

2. Where capture and

injection operations are

separate, emissions at the

source are reported

separately.

Not applicable for this project.

3. The acid gas injection

scheme has obtained

approval from the Alberta

Energy Regulator under

Directive 051.

Substantive test: Review the operation’s

approval to operate an AGI scheme under

Directive 051.

The acid gas injection scheme has an approval to operate an AGI

scheme, as evidenced by project documentation.


4. Metering of injected

gas volumes occurs as

near as possible to

injection well.

Substantive test: Interview site operators

and metering diagram during site visit

regarding the location of the injection meter.

Metering of acid gas injected occurs at the injection wellhead as

confirmed during the site visit.




9




project must occur at a

facility that commenced

commercial operations

prior to July 1, 2007.

Substantive test: Confirm that commercial

operations began at the facility prior to July

1, 2007 by interviewing plant operators

during the site visit.

Commercial operations began at the AltaGas Bantry facility before

January 1, 2007, as confirmed with site operation personnel during

the site visit.


6. Consolidation of

multiple gas streams at

the capture facility should

have sufficient

transparency in the data

to attribute emissions to

each originating facility.

Substantive test: Review reported GHG

information to trace emissions data back to

each source of inlet gas at the capture

facility.

Reported GHG information has sufficient transparency to

disaggregate the information and trace emissions back to specific

inlet gas streams.


Substantive test: interview site operators

during site visit to determine if inlet gas

originates from facilities that are regulated

under SGER.

The Bantry facility is not receiving inlet gas from any other facility, as

confirmed during the site visit.


7. The emission reduction

quantification is based on

actual measurements.

Substantive test: Review source of

quantitative data used in the emission

reduction quantification and compare to

protocol requirements for measurement type

and frequency.

Modeled and actual measurements are used to quantify emissions

in the baseline condition.

Actual measurements are used to quantify all emission sources in

the project condition except electricity consumption of auxiliary

equipment and heaters, which each account for small proportions

of the total emissions in the project condition.

All parameters meet the monitoring requirements of the Protocol.




10



8. The project must meet

the eligibility criteria stated

in section 7 of the

Specified Gas Emitters

Regulation (these are the

requirements of the

Alberta Offset System)

Substantive test: Review the evidence

provided by the Responsible Party related to

the requirements of the Alberta Offset

System.

Occurs in Alberta – The AltaGas Bantry facility is located near

Tilley, Alberta, as confirmed during the site visit.

Actions not otherwise required by law – confirmed that acid gas

injection is not a required activity.

Actions taken on or after January 1, 2002 – commissioning of

the acid gas injection facility occurred in 2009, as confirmed by

project documentation.

Real, demonstrable, quantifiable – the verification procedures

confirmed that the emission reductions in the assertion meet these

requirements. The specific verification procedures supporting this

conclusion include observation during the site visits, review of

supporting meter calibration reports and documentation and the

recalculation of the emission reduction.

Clearly established ownership – AltaGas Bantry is owned by the

Responsible Party, as shown on the AltaGas website and asserted

by the Responsible Party.

Counted once for compliance purposes – The Responsible Party

provided a Statutory Declaration that the emission reduction will be

registered only in the Alberta Offset System.




11



PROTOCOL FLEXIBILITY

Project developers may

use an alternate sulphur

recovery process, but

must justify the method

for calculating baseline

emissions from this

alternate technology.

Substantive test: Review the justification for

the baseline calculation method for the

baseline technology and compare to

protocol requirements.

The baseline condition for the Project was the continued use of the

Xergy SRU that had been in operation at the site since 2002.

Although this system was challenging to operate, it was achieving

the required sulphur recovery. This baseline scenario meets the

requirements of the Protocol.


QUANTIFICATION DATA

Sulphur recovery unit –

estimated monthly run

time, tail gas composition,

tail gas volume

Substantive test: Analyze SULSIM model

inputs, comparing input values to plant

operational values.

The model input data was reviewed. The 2016 gas composition

and gas flow rates matched the data used in the emission

reduction quantification.


Substantive test: Assess accuracy of

transcription of SULSIM model results to

quantities applied in emission reduction

quantification.

The SULSIM model results were correctly transcribed into the

emission reduction quantification.


Gas volumes – acid gas

injection, flare, flare fuel

Controls test: Review meter calibration

documentation for each meter used in


Meter calibration reports were available for all gas meters used in

the emission reduction quantification. All meter reports indicated

that meters were operating within manufacturer specifications

through the course of the reporting period.




12



Gas compositions – plant

fuel gas, acid gas

Substantive test: Review gas composition

reports for invalid results and compare

transcription of results into the emission


All gas compositions were found to be valid results and correctly

transcribed into the emission reduction quantification.


AGI injection compressor

electricity consumption

Substantive test: Compare transcription of

electricity consumption data into the


Electricity consumption data was correctly transcribed into the



AGI injection auxiliary

equipment electricity

consumption

Substantive test: Observe AGI auxiliary

equipment during site visit and compare to

equipment inventory in the Offset Project

Plan.

The inventory of auxiliary equipment for the acid gas injection

process in the project documentation is complete, based on

observations made during the site visit.


Substantive test: Analyze equipment

nameplate ratings and runtime assumptions

for appropriateness.

Equipment nameplate ratings and runtimes were compared to

equipment at a similar facility and found to be appropriate. Runtime

assumptions are appropriate based on a review of the gas plant

operating time for the reporting period.


Heaters – power rating,

number in service,

operating hours

Substantive test: Analyze equipment



Equipment nameplate ratings and runtimes were compared to

equipment at a similar facility and found to be appropriate. Runtime

assumptions are appropriate based on a review of the gas plant

operating time for the reporting period.




13



Emission factors – natural

gas combustion, natural

gas extraction and

processing, Alberta


grid factor

Substantive test: Compare transcription of

emission factors into the emission reduction

quantification.

The emission factors used in the emission reduction quantification

were correctly transcribed from the Alberta Emission Factor

Handbook.


EMISSION REDUCTION QUANTIFICATION AND REPORT

Application of the

approved quantification

protocol

Substantive test: Compare the

methodologies described in the Responsible

Party’s Offset Project Plan to the

methodologies described in the approved

quantification protocol.

The verification team compared the methods described in the

Offset Project Plan to the methods described in the approved

Quantification Protocol.

The quantification methods described in the Responsible Party’s

Offset Project Plan adhere to the methods described in the

approved Quantification Protocol.


Substantive test: Recalculate the emission

reduction using original metered data.

The independent recalculation of the emission reduction resulted in

the same emission reduction quantity asserted by the Responsible

Party. Therefore, the approved Protocol quantification methods

were applied in the Responsible Party’s emission reduction

quantification.




14



Quantification of emission

reduction



The independent recalculation of the emission reduction resulted in

the same emission reduction quantity asserted by the Responsible

Party. Therefore, the verification team concluded that no arithmetic

or calculation errors were made by the Responsible Party in the



Transcription of final

emission reduction into

Offset Project Report

Substantive test: Compare the final emission

reduction quantity reported by the

Responsible Party to the quantity reported in

the Offset Project Report. Also, compare

these quantities to the recalculated quantity

in previous verification procedures.

The emission reduction quantity was accurately transcribed into the

Offset Project Report.




15

Additional Findings

The previous verification for this facility, which was conducted by ICF Consulting Canada, Inc., identified

a qualitative discrepancy related to the electricity grid consumption emission factor applied in the

emission reduction quantification. Recent (draft) guidance from AEP, which will be effective for the 2017

reporting period, indicates that projects may apply revised emission factors, provided all emission

factors referenced from a specific source are updated. It remains unclear if the emission factor

described above should be updated. The revised emission factor applied in the emission reduction

quantification results in a GHG assertion 665 tonnes CO2e greater than if the original emission factor,

which is defined in the Offset Project Plan, was applied (approximately 1.6% of the emission reduction

asserted).

Confirmations

Section 5.4 of the Alberta Environment and Parks Verification Technical Guidance document lists six

activities that are beyond the scope of a typical greenhouse gas verification, but are required by Alberta

Environment and Parks.

The “confirmations” refer to information contained in the Specified Gas Compliance Report (Excel

spreadsheet) submitted by the Responsible Party.

Table 5: Confirmation Findings

Confirmation Confirmation Findings

Consistency of offset project

information across offset

project documentation

Offset project information in the Offset Project Plan is consistent

with the information in the Offset Project Report. All information is

consistent with the requirements described in the relevant criteria.

Offset project location and

any applicable approvals

information

The project is located near Tilley, Alberta, as confirmed during the

site visit.

The acid gas injection scheme has an approval to operate an AGI

scheme, as evidenced by project documentation.

Methodology documents or

procedures manual exist

The Responsible Party has documented all relevant methodologies,

procedures and controls in the Offset Project Plan.

Offset project contact, report

dates, emission reduction

numbers, etc. (part of one

above)

The Offset Project Report was signed by the AltaGas Divisional Vice

President, Gas Commercial. The final emission reduction quantity

calculated by the Responsible Party was accurately transcribed into

the Offset Project Report.

Completeness and accuracy

of process and data flow

diagrams

The Responsible Party’s data flow chart, which is included in the

Offset Project Plan, accurately describes the data flows within the

project.



16

Appendices

The following documents are appended to this report, as follows:

Peer Review Report

Statement of Qualifications

Conflict of Interest Statement

Final Verification Plan

Peer Review Report

Verification Activities Reviewed

Verification Process Comments

Verification Risk Assessment

The verification risk assessment identified all relevant emission sources described in the Quantification Methodology Document and site visit notes.

Verification activities were designed to mitigate the inherent and control risks defined during the risk assessment.

Data Sampling Data sampling was not used for this verification.

Verification Activities Working notes provide sufficient detail to demonstrate that all verification activities were completed through the course of the verification.

Issues raised during the verification

All questions and issues raised during the verification were sufficiently addressed by the Responsible Party.

Conflict of Interest An assessment for threats to independence was conducted before the verification began and after the verification was completed. No real or perceived conflicts of interest were identified.

Verification Conclusion

Verification Evidence Comments

Eligibility Evaluation Sufficient evidence supporting the eligibility of the project was provided by the Responsible Party.

Sufficient and Appropriate Evidence

The evidence collected through the verification activities reduces the overall verification risk and supports the verification conclusion.

Discrepancy Analysis No unresolved discrepancies.

Verification Report All documentation required in the Verification Report is included and complete.

Based on the documentation reviewed during the peer review process, I believe the verification of the 2016 vintage verification for the abovementioned Project was completed in accordance with the ISO 14064-3 standard and the criteria established in the Alberta Environment and Parks document, ”Technical Guidance for Greenhouse Gas Verification at Reasonable Level of Assurance, Version 1.0 January 2013.” as well as the “Quantification Protocol for Acid Gas Injection, Version 1.0, May 2008.” Sincerely, Nathan Muegge, P.Eng. (p)

Responsible Party: AltaGas Processing Partnership

Project: AltaGas Bantry Acid Gas Injection Project

Date Peer Review Completed: March 9th, 2017

647.280.0410

18

Statement of Qualifications

Lead Verifier Details

Lead Verifier Name: Aaron Schroeder

Professional Designation: Professional Engineer

Email: [email protected]

Phone Number: +1 (604) 353-0264

Verifying Company Name: Brightspot Climate Inc.

Lead Verifier Training

• GHG Verification - ISO 14064-3, Canadian Standards Association, 2012

• CCP 403 - GHG Validation and Verification, University of Toronto, 2016 (Instructor)

Verification Team Biographies

Lead Verifier: Aaron Schroeder, P.Eng. has eleven years of professional experience analyzing,

quantifying and auditing greenhouse gas emissions in North America. Mr. Schroeder’s hands on

experience conducting over 150 greenhouse gas verifications includes numerous engagements for

industrial facilities in power generation, oil and gas production and processing, natural gas pipelines and

a wide range of emission reduction projects in beef and dairy management, conservation cropping

(zero-tillage) and nitrogen fertilizer management, and renewable energy and waste management. Mr.

Schroeder is a sessional instructor at the University of Toronto’s School of Environment for professional

development. He instructs the school’s greenhouse gas quantification and verification courses.

Analytical Support: Will Grundling, MSc. will provide analytical support to the verification team through

the completion of the verification procedures and the development of the Verification Report. His

verification experience includes event inventories, Alberta’s SGER compliances, Ontario GHG Reporting

Regulation verifications, and Fed Cattle Aggregation and Vent Gas and Instrument Air offset projects.

Peer Reviewer: Chris Caners, P.Eng., will conduct an independent peer review of the verification. He

has completed over 100 greenhouse gas verifications of annual SGER compliance reports as Lead

Verifier or Technical Expert, including reports for several natural gas processing facilities.

Statement

I, Aaron Schroeder, meet or exceed the qualifications of third party auditors described in Section 18 of

the Specified Gas Emitters Regulation.

Signed: Date:

Aaron Schroeder, P.Eng.

Brightspot Climate Inc.

Vancouver, British Columbia

March 9, 2017


Conflict of Interest AltaGas Bantry Acid Gas Injection Project

Brightspot Climate monitored threats to independence throughout the duration of the project. The

following declaration affirms that:

1. The verifying organization or the verification team members do not financially benefit directly

from the Project Developer or the Project Developer’s Project.

2. The verifying organization or verification team members are not in a position of assessing their

own work.

3. The verifying organization, members of the verification team, or persons in the chain of

command for the verification do not promote, nor can be perceived to promote, the Project

Developer's position or opinion to the point that objectivity may, or may be perceived to be,

compromised.

4. No member of the verification team is too sympathetic to the Project Developer's interests by

virtue of a close relationship with the Project Developer, its directors, officer or employees.

5. No member of the verification team or person in the chain of command is deterred from acting

objectively and exercising professional skepticism by threats, actual or perceived, from the

directors, officers or employees of the Project Developer.

Date: March 9, 2017

Location: Vancouver, BC

Signed:

Aaron Schroeder

Lead Verifier. Brightspot Climate


AltaGas Processing Partnership

AltaGas Bantry Acid Gas Injection Project Verification Plan

February 10, 2017

This page intentionally blank

Brightspot Climate Inc. – Verification Plan AltaGas Processing Partnership – AltaGas Bantry Acid Gas Injection Project

i

Terminology

ISO 14064-2 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

The Alberta Environment and Parks Technical Guidance Document1 extends this definition to

include the document that identifies the greenhouse gas emission reduction and/or removals

and offset credits being claimed by the offset project over a defined period.

Project: activity or activities that alter the conditions identified in the baseline scenario which

cause greenhouse gas emission reductions or greenhouse gas removal enhancements.

The GHG Assertion subject of this verification is for the AltaGas Bantry Acid Gas Injection

Project, which will be referred to throughout this document as “the Project”.

ISO 14064-2 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is AltaGas Processing Partnership.

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is Alberta Environment and Parks (AEP).

Verifier: competent and independent person, or persons, with the responsibility of performing

and reporting on the verification process.

The Verifier for this verification is Brightspot Climate Inc. (Brightspot Climate). The members of

the verification team are provided in section 3 of this document.



1

Introduction

This document serves to communicate information between the parties associated with the

independent verification of the Offset Project Report for AltaGas Bantry Acid Gas Injection Project.

This document contains three sections:

1. The introduction, which defines the principles by which this verification will be conducted;

2. The GHG Assertion, which describes the subject matter of the verification; and

3. The Verification, which defines the verification parameters and the GHG inventory principles that

will be tested by the verification. This third section also provides information regarding the

verification team and any findings from previous verifications for this Project.

The verification procedures, including the sampling plan and the results of the verification risk

assessment, will be appended to this verification plan in the final verification report.

The Responsible Party developed the Project in accordance with the requirements of the Quantification

Protocol for Acid Gas Injection, Version 1, May 2008 (the Protocol).

Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely

independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including mandatory training for all verification team

members, to ensure the application of these principles for this verification.

Regarding the principle of independence, Brightspot Climate assessed threats to independence prior to

initiating this verification. No real or perceived threats to independence were identified. Brightspot

Climate will continue to monitor for threats to independence throughout the course of this verification. A

final “Conflict of Interests Checklist” will be appended to the Verification Statement.


2

GHG Assertion

Project Subject Matter

The Technical Guidance Document2 defines “subject matter” in Section 2.2.3.2 as follows:

“The subject matter for an offset project is the greenhouse gas emissions from the offset project

and baseline, including the total greenhouse gas emission reduction and/or removals achieved

by the offset project that can be appropriately evaluated against the program criteria.”

The subject matter for the Project is defined in the verification scope, which is described in Table 4.

GHG Assertion

The Responsible Party’s asserted emission reduction is provided in the following table:

Table 1: Baseline and Previous GHG Assertions

GHG Emission Reduction 2016: 42,407 tonnes CO2e

Source: AltaGas Bantry Acid Gas Injection Project 2016 Offset Project Report

Changes to Operations and Boundaries

This is the first year that Brightspot Climate has provided verification services for the Project.

Responsible Party’s Data Management Systems

Table 2, below, describes the data measurement, estimation and data storage locations for all GHG

information used by the Responsible Party to produce the GHG inventory. The final column in this table

describes the data storage location and the path (intermediate data transfer) prior to use in the GHG

inventory.

Table 2: GHG Inventory Data Management

Activity Data Description Measurement Type Data Storage Location / Path


estimated monthly run time, tail

gas composition, tail gas volume

Modeled in SULSIM SULSIM Report

>> Emission Reduction Quantification


injection, flare, flare fuel Metered

AltaGas Historian

>> AltaGas Production Accounting

>> Petrinex Reports


Gas compositions – plant fuel

gas, acid gas Measured

Maxxam Laboratories Reports



electricity consumption Metered

Fortis Data Extract Report




3

Activity Data Description Measurement Type Data Storage Location / Path

AGI injection auxiliary equipment

electricity consumption Estimated

Nameplate readings, plant run time


Heaters – power rating, number

in service, operating hours Estimated

Nameplate readings, plant run time


Emission factors – natural gas

combustion, natural gas

extraction and processing,

Alberta electricity consumption

grid factor

Reference values Alberta Emission Factor Handbook


Responsible Party’s Control Environment

The following table describes the Responsible Party’s quality assurance controls applied to the GHG

information used to produce the GHG inventory. Note that the verification procedures may not rely

upon these controls to establish sufficient and appropriate evidence to support the GHG Assertion.

Table 3: Responsible Party Data Controls

Activity Data Description Responsible Party Controls

Gas volumes – acid gas injection, flare, flare fuel Responsible party conducts periodic meter

calibration.

Application of the approved quantification protocol

Responsible Party has developed an Offset

Project Plan that is intended to conform to the

requirements of the approved quantification

protocol.

Verification

Principles

ISO 14064-2 defines six principles that are fundamental to the fair accounting and reporting of GHG

information. The verification procedures will test that these principles have been upheld through the

Responsible Party’s inventory, accounting and reporting processes.

Section 3.2 – 3.6 of ISO 14064-1 defines these principles as follows:

Accuracy: reduce bias and uncertainty as far as practical

Completeness: include all relevant emission sources

Conservativeness: use conservative assumptions, values and procedures to ensure that GHG

emission reductions or removal enhancements are not over-estimated

Consistency: enable meaningful comparisons of reported emissions (from year to year or

between facilities or between companies)


4

Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies

appropriate to the needs of the intended user

Transparency: disclose sufficient and appropriate GHG information to facilitate verification and

to allow intended users to make decisions with relative confidence

Verification Parameters

The verification will be conducted according to the parameters defined in the following table:

Table 4: Verification Parameters

Level of Assurance Reasonable assurance

Objectives

• issue a verification statement on whether the GHG

assertion is without material discrepancy;

• issue a verification report that provides details of the

verification activities; and

• complete the “confirmations” activities defined in the

Alberta Environment and Parks Guidance Document3,

Section 5.4, Table 26.

Criteria

• Climate Change and Emissions Management Act

• Specified Gas Emitters Regulation

• Technical Guidance for Offset Project Developers, Version

4.0, February 2013

• Technical Guidance for Greenhouse Gas Verification at

Reasonable Level Assurance, Version 1.0, January 2013

• Quantification Protocol for Acid Gas Injection, Version 1,

May 2008



5

Scope

Project Name: AltaGas Bantry Acid Gas Injection

Project





Physical Operations: Capture and permanent sequestration of

the acid gas stream to reduce the quantity

of CO2 released to the atmosphere

Project condition includes compression,

transportation, and injection of acid gas

Baseline processes include flaring

Emission Sources: Natural Gas Combustion, Extraction and

Processing

Electricity Consumption

IPCC GHGs Emitted: CO2, CH4 and N2O

Reporting Period: January 1, 2016 – December 31, 2016

Materiality Quantitative materiality threshold is 5% of asserted greenhouse gas

emission reduction

Tolerable Error Thresholds

An unqualified verification conclusion may be issued despite

immaterial quantitative discrepancies that do not exceed the

materiality threshold in aggregate (calculated as both net and gross

overall discrepancy).

The tolerable error threshold per issue in either the baseline or

project condition will be graduated as follows for emission sources:

• 2% for emission sources greater than 50% of total baseline

or project emissions;

• 5% for emission sources between 20% and 50% of total

baseline or project emissions; and

• 10% for emission source less than 20% of total baseline or

project emissions.

All discrepancies will be described in the Verification Report.


6

Preliminary Verification

Schedule

Verification Kickoff Meeting: January 23, 2017

Draft Verification Plan: February 10, 2017

Site Visit: February 10, 2017

Draft Verification Report : February 28, 2017

Final Verification Report March 1, 2017

Findings from Previous Verifications

There was one qualitative misstatement from the previous verification report, as follows.

The emission factor used for quantification of emissions associated with electricity consumption

in the project condition was changed in the 2015 GHG Assertion. The emission factor has been

changed from 0.88 to 0.64 tCO2e/MWh to reflect the Carbon Offset Emission Factors

Handbook dated March 4, 2015.

The change accounts for an increase of approximately 1,613 tCO2e, or 2% of the total

Assertion in comparison to emission quantified with the electricity emission factor used in

previous reporting periods. Due to the ambiguity of the direction provided in the Memorandum,

this has been qualified as a qualitative misstatement. Emission factor reference sources for all

other parameters are consistent with the Offset Project Plan. No other emission factor reference

sources were updated to reflect the Carbon Offset Emission Factors Handbook.

Source: AltaGas Bantry Acid Gas Injection Project Verification Report, March 1, 2016

Verification Team

Aaron Schroeder, P.Eng., will be the Lead Verifier and Designated Signing Authority for this verification.

His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject

matter areas defined in the ISO 14064-3.

Will Grundling, MSc. will provide analytical support to the verification team through the completion of

the verification procedures and the development of the Verification Report. His verification experience

includes event inventories, Alberta’s SGER compliances, Ontario GHG Reporting Regulation

verifications, and Fed Cattle Aggregation and Vent Gas and Instrument Air offset projects.

Nathan Muegge, P.Eng., will conduct an independent peer review of the verification. Mr. Muegge has

completed over 30 greenhouse gas verifications of annual SGER compliance reports as Lead Verifier or

Technical Expert, including reports for several natural gas processing facilities.

Additional information regarding the qualifications of the verification team will be provided in a

Statement of Qualifications, which will be appended to the Statement of Verification.

Site Safety Requirements

Personnel conducting site visits are required to wear personal protective equipment including steel-toed

boots, Nomex coveralls, hard hat, safety glasses with side shields and gloves. A site orientation must

be completed before entering the site.


7

Verification Risk Assessment and Verification Procedures

The Verification Risk Assessment was completed prior to issuing the draft version of this document.

Verification procedures were developed to reduce the overall verification risk to facilitate the objectives

of the verification. Each inherent and control risk is provided with the risk evaluation (high/medium/low).

The risk evaluation considers both the magnitude of the activity data or inventory component on the

overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed by

the verifier.

In instances where a substantive approach is applied in the verification procedure (i.e. the procedure

tests the data, rather than the Responsible Party’s controls), the Responsible Party’s control is not

listed, but is denoted “N/A”; however, this does not imply that the Responsible Party does not have a

control in place.

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the

product of the Project’s inherent risks, the Responsible Party’s control risks and the Verifier’s detection

risks. The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall

verification risk and reach the agreed level of assurance (defined in the verification scope), the verifier

must design verification procedures that reduce the detection risk.


8

Table 5: Verification Risk Assessment Summary

Activity Data /

Inventory Component

Inherent Risk Control Risk Detection

Risk Design

Description of Verification Procedure

PROTOCOL APPLICABILITY REQUIREMENTS

1. The project results

from emissions that

otherwise would have

been released to the

atmosphere.

Relevance (high)

Baseline scenario may

not meet eligibility

requirements.

N/A (controls not

considered for

verification)

Low Substantive test: Review project schematics

and interview facility operators to determine if

baseline scenario described in the Offset

Project Plan is applicable.

2. Where capture and

injection operations are

separate, emissions at

the source are reported

separately.

N/A – this requirement does not apply to this project because the capture facility is not regulated under SGER.


scheme has obtained

approval from the

Alberta Energy Regulator

under Directive 051.

Relevance (low)

The operation may not

have approval to operate

under Directive 051.

N/A (controls not

considered for

verification)

Low Substantive test: Review the operation’s

approval to operate an AGI scheme under

Directive 051.

4. Metering of injected

gas volumes occurs as

near as possible to

injection well.

Accuracy (medium)

Metering may occur

upstream of the injection

well, which would not

account for fugitive or

venting emissions

downstream of the

meter.

N/A (controls not

considered for

verification)

Low Substantive test: Interview site operators and

metering diagram during site visit regarding

the location of the injection meter.


9

Activity Data /

Inventory Component


Risk Design



project must occur at a

facility that commenced


prior to July 1, 2007.

Relevance (high)

The facility may not be

eligible to create offsets if


began after July 1, 2007.

N/A (controls not

considered for

verification)

Low Substantive test: Confirm that commercial

operations began at the facility prior to July 1,

2007 by interviewing plant operators during

the site visit.

6. Consolidation of

multiple gas streams at

the capture facility

should have sufficient

transparency in the data

to attribute emissions to


Transparency (medium)

Emissions data should

have sufficient

transparency to evaluate

eligibility of the project by

tracing data back to


N/A (controls not

considered for

verification)

Low Substantive test: Review reported GHG

information to trace emissions data back to

each source of inlet gas at the capture facility.

Substantive test: interview site operators

during site visit to determine if inlet gas

originates from facilities that are regulated

under SGER.

7. The emission

reduction quantification

is based on actual

measurements.

Accuracy (medium)

Estimates may be used

in place of

measurements in the

emission reduction

quantification.

N/A (controls not

considered for

verification)

Low Substantive test: Review source of

quantitative data used in the emission

reduction quantification and compare to

protocol requirements for measurement type

and frequency.


10

Activity Data /

Inventory Component


Risk Design


8. The project must

meet the eligibility criteria

stated in section 7 of the

Specified Gas Emitters

Regulation (these are the

requirements of the

Alberta Offset System)

Relevance (high)

Responsible Party may

not be able to

demonstrate that the

offset projects meets the

requirements of the

Alberta Offset System.

N/A (controls not

considered for

verification)

Low Substantive test: Review the evidence

provided by the Responsible Party related to

the requirements of the Alberta Offset

System.

PROTOCOL FLEXIBLITY

Project developers may

use an alternate sulphur

recovery process, but

must justify the method

for calculating baseline

emissions from this

alternate technology.

Relevance (high)

The method for

calculating the baseline

may not be meet the

protocol requirements.

N/A (controls not

considered for

verification)

Low Substantive test: Review the justification for

the baseline calculation method for the

baseline technology and compare to protocol

requirements.

QUANTIFICATION DATA


estimated monthly run

time, tail gas

composition, tail gas

volume

Accuracy (high)

Modeled values may not

represent site operations

or may not be accurately

applied to emission


N/A (controls not

considered for

verification)

Low Substantive test: Analyze SULSIM model

inputs, comparing input values to plant

operational values.


11

Activity Data /

Inventory Component


Risk Design


Substantive test: Assess accuracy of

transcription of SULSIM model results to

quantities applied in emission reduction

quantification.


injection, flare, flare fuel

Accuracy (high)

Metered quantity may be

inaccurate.

Responsible party

conducts periodic meter

calibration.

Meter calibration may be

incomplete or

undocumented (low risk).

Low Controls test: Review meter calibration

documentation for each meter used in


Gas compositions –

plant fuel gas, acid gas

Accuracy (high)

Gas composition analysis

received from

independent labs may

contain invalid results or

be incorrectly

transcribed.

N/A (controls not

considered for

verification)

Low Substantive test: Review gas composition

reports for invalid results and compare

transcription of results into the emission




Accuracy (medium)

Electrical consumption

quantities may be

incorrectly transcribed

from third party report.

N/A (controls not

considered for

verification)

Low Substantive test: Compare transcription of

electricity consumption data into the emission



12

Activity Data /

Inventory Component


Risk Design


AGI injection auxiliary

equipment electricity

consumption

Completeness (low)

Equipment inventory may

be incomplete.

N/A (controls not

considered for

verification)

Medium Substantive test: Observe AGI auxiliary

equipment during site visit and compare to

equipment inventory in the Offset Project

Plan.

Accuracy (low)

Assumed values for

estimating equipment


may be inappropriate.

N/A (controls not

considered for

verification)

High Substantive test: Analyze equipment



Heaters – power rating,

number in service,

operating hours

Accuracy (low)

Assumed values for

estimating equipment

electricity or natural gas

consumption may be

inappropriate.

N/A (controls not

considered for

verification)

High Substantive test: Analyze equipment



Emission factors –

natural gas combustion,

natural gas extraction

and processing, Alberta


grid factor

Accuracy (high)

Emission factors may not

have been accurately

transcribed into the

emission reduction

quantification

N/A (controls not

considered for

verification).

Low Substantive test: Compare transcription of

emission factors into the emission reduction

quantification.


13

Activity Data /

Inventory Component


Risk Design


EMISSION REDUCTION QUANTIFICATION AND REPORT

Application of the


protocol

Accuracy (high)

The project developer

may not have

implemented approved

quantification

methodologies or applied

additional

methodologies.

Responsible Party has

developed an Offset

Project Plan that is

intended to conform to

the requirements of the


protocol.

The protocol

requirements may not

have been implemented

correctly (medium)

Low Substantive test: compare the methodologies

described in the Responsible Party’s Offset

Project Plan to the methodologies described

in the approved quantification protocol.



Quantification of

emission reduction

Accuracy (high)

Emission reduction

calculation may contain

arithmetic errors.

N/A (controls not

considered for

verification)

Low Substantive test: Recalculate the emission



14

Activity Data /

Inventory Component


Risk Design


Transcription of final

emission reduction into

Offset Project Report

Accuracy (high)

Final emission reduction

may not have been

transcribed accurately

from calculation

spreadsheets into the

Offset Project Report.

N/A (controls not

considered for

verification)

Low Substantive test: compare the final emission

reduction quantity reported by the

Responsible Party to the quantity reported in

the Offset Project Report. Also, compare

these quantities to the recalculated quantity in

previous verification procedures.


15

Sampling Plan

The verification procedures that could apply sampling of the project data are listed in the following table.

The sampling size, the sampling methodology and their respective justifications are also described in the following table.

Table 6: Sampling Plan

Activity Data /

Inventory

Component

Detection

Risk

Design

Description of Verification

Procedure

Sampling Methodology and

Justification

Sample Size

Sampling was not used for any of the verification procedures in this verification.

Verification Report Bantry AGI

Documents

Transcript of Verification Report Bantry AGI