Reports related to this article:
Project(s): View 10 related projects in PECWeb
Plant(s): View 2 related plants in PECWeb
Released November 10, 2023 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas) has gone into direct air capture (DAC) of carbon dioxide (CO2) in a big way.
DAC involves technologies to extract CO2 directly from the atmosphere, for direct storage or utilization, according to the International Energy Agency (Paris, France).
Occidental, traditionally an oil and gas company and chemicals producer, announced Tuesday it landed a major joint venture partner for its DAC project in West Texas, bringing in a major investment. On Wednesday, Occidental executives outlined the company's DAC development and market strategy.
Occidental announced investment firm BlackRock (NYSE:BLK) (New York, New York) has agreed to form a joint venture with Occidental's subsidiary, 1PointFive, to help develop the STRATOS DAC facility in Ector County, Texas. BlackRock will invest $550 million in the joint venture.
Occidental Chief Executive Vicki Hollub said in a press release that the joint venture "demonstrates that direct air capture is becoming an investable technology and BlackRock's commitment in STRATOS underscores its importance and potential for the world."
STRATOS is designed to capture up to 500,000 metric tons of CO2 per year. Construction activities for STRATOS are approximately 30% complete, according to Occidental, and the facility is expected to be commercially operational in mid-2025. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for related reports.
Occidental's involvement with DAC technology doesn't end with STRATOS. In August, the U.S. Department of Energy (DOE) awarded up to $1.2 billion for two DAC projects in Texas and Louisiana. The Texas project selected for the grant was 1PointFive's planned South Texas DAC hub on the King Ranch in Kleberg County. An initial phase of construction would capture 1 million tons of carbon from the air, but 1PointFive says that the hub could eventually be able to remove and store up to 30 million metric tons of carbon per year. Additional DAC capacity would be added in subsequent phases of construction. Subscribers can click here for more details on the project.
In September, Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington) signed an agreement with 1PointFive to purchase 250,000 tons of carbon removal credits (CDRs) over a 10-year period. 1PointFive also has signed CO2 removal credit purchase agreements with Airbus, All Nippon Airways (ANA), TD Bank Group, the Houston Astros and the Houston Texans.
In October, Occidental announced that 1PointFive and the Abu Dhabi Oil Company (ADNOC) (Abu Dhabi) signed an agreement to start a preliminary engineering study for a 1 million-metric-ton-per-year DAC facility in the United Arab Emirates.
During Occidental's third-quarter earnings conference call on Wednesday, Richard Jackson, president of U.S. Onshore Resources and Carbon Management, Operations, explained the need to reduce the cost of DAC.
"The next phase of our DAC strategy is focused on growth through accelerating cost reduction and expanding partnerships," Jackson said.
However, even if the price of DAC remains at $450 per metric ton of CO2, "we still expect the market for DAC-generated CDRs to be significantly undersupplied," he said.
The development of the CDR market is a critical component in Occidental's plans. Jackson said Occidental's DAC technology can provide CDRs "at a lower cost and at larger scale than other product solutions, especially for businesses in the heavy-duty transportation sector that are working to hit decarbonization targets this decade."
As an example, Jackson pointed out the aviation industry, where demand for CDRs "is expected to reach an inflection point in 2027 when the International Civil Aviation Organization begins requiring airlines to reduce or offset their annual emissions through the Carbon Offsetting and Reduction Scheme for International Aviation, also known as CORSIA."
Airlines have limited options when it comes to carbon reduction, such as the use of sustainable aviation fuel (SAF), and operational improvements, he said, so the acquisition of DAC-based CDRs "will be an essential cost-effective solution for several hard-to-abate industries to achieve their targets within these compliance markets."
Hollub said during the conference call that the licensing of Occidental's DAC technology to other developers also would provide a source of revenue.
With the help of partners, she said, thousands of DAC units could be built for various industries to meet their carbon reduction goals.
"And we've talked about regional concepts, having partners, around the world that can manage and drive their own construction of these facilities as we go and they, what would come back to us would be those licensing fees," Hollub said.
For related information, see November 9, 2023, article - Direct Air Capture Breathes New Life into Carbon Capture Solutions.
Subscribers can click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info is tracking 60 projects from Occidental, worth $13.35 billion. Subscribers can click here for a list of detailed project reports.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
DAC involves technologies to extract CO2 directly from the atmosphere, for direct storage or utilization, according to the International Energy Agency (Paris, France).
Occidental, traditionally an oil and gas company and chemicals producer, announced Tuesday it landed a major joint venture partner for its DAC project in West Texas, bringing in a major investment. On Wednesday, Occidental executives outlined the company's DAC development and market strategy.
Occidental announced investment firm BlackRock (NYSE:BLK) (New York, New York) has agreed to form a joint venture with Occidental's subsidiary, 1PointFive, to help develop the STRATOS DAC facility in Ector County, Texas. BlackRock will invest $550 million in the joint venture.
Occidental Chief Executive Vicki Hollub said in a press release that the joint venture "demonstrates that direct air capture is becoming an investable technology and BlackRock's commitment in STRATOS underscores its importance and potential for the world."
STRATOS is designed to capture up to 500,000 metric tons of CO2 per year. Construction activities for STRATOS are approximately 30% complete, according to Occidental, and the facility is expected to be commercially operational in mid-2025. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for related reports.
Occidental's involvement with DAC technology doesn't end with STRATOS. In August, the U.S. Department of Energy (DOE) awarded up to $1.2 billion for two DAC projects in Texas and Louisiana. The Texas project selected for the grant was 1PointFive's planned South Texas DAC hub on the King Ranch in Kleberg County. An initial phase of construction would capture 1 million tons of carbon from the air, but 1PointFive says that the hub could eventually be able to remove and store up to 30 million metric tons of carbon per year. Additional DAC capacity would be added in subsequent phases of construction. Subscribers can click here for more details on the project.
In September, Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington) signed an agreement with 1PointFive to purchase 250,000 tons of carbon removal credits (CDRs) over a 10-year period. 1PointFive also has signed CO2 removal credit purchase agreements with Airbus, All Nippon Airways (ANA), TD Bank Group, the Houston Astros and the Houston Texans.
In October, Occidental announced that 1PointFive and the Abu Dhabi Oil Company (ADNOC) (Abu Dhabi) signed an agreement to start a preliminary engineering study for a 1 million-metric-ton-per-year DAC facility in the United Arab Emirates.
During Occidental's third-quarter earnings conference call on Wednesday, Richard Jackson, president of U.S. Onshore Resources and Carbon Management, Operations, explained the need to reduce the cost of DAC.
"The next phase of our DAC strategy is focused on growth through accelerating cost reduction and expanding partnerships," Jackson said.
However, even if the price of DAC remains at $450 per metric ton of CO2, "we still expect the market for DAC-generated CDRs to be significantly undersupplied," he said.
The development of the CDR market is a critical component in Occidental's plans. Jackson said Occidental's DAC technology can provide CDRs "at a lower cost and at larger scale than other product solutions, especially for businesses in the heavy-duty transportation sector that are working to hit decarbonization targets this decade."
As an example, Jackson pointed out the aviation industry, where demand for CDRs "is expected to reach an inflection point in 2027 when the International Civil Aviation Organization begins requiring airlines to reduce or offset their annual emissions through the Carbon Offsetting and Reduction Scheme for International Aviation, also known as CORSIA."
Airlines have limited options when it comes to carbon reduction, such as the use of sustainable aviation fuel (SAF), and operational improvements, he said, so the acquisition of DAC-based CDRs "will be an essential cost-effective solution for several hard-to-abate industries to achieve their targets within these compliance markets."
Hollub said during the conference call that the licensing of Occidental's DAC technology to other developers also would provide a source of revenue.
With the help of partners, she said, thousands of DAC units could be built for various industries to meet their carbon reduction goals.
"And we've talked about regional concepts, having partners, around the world that can manage and drive their own construction of these facilities as we go and they, what would come back to us would be those licensing fees," Hollub said.
For related information, see November 9, 2023, article - Direct Air Capture Breathes New Life into Carbon Capture Solutions.
Subscribers can click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info is tracking 60 projects from Occidental, worth $13.35 billion. Subscribers can click here for a list of detailed project reports.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
