BlackRock to Invest $550 Million in Occidental's Carbon Capture Project
(Reuters) — BlackRock Inc, the world's biggest money manager, will invest $550 million in Occidental Petroleum Corp.’s direct air capture (DAC) plant in West Texas, the two companies announced on Tuesday.
Occidental has been shopping for investors since last year for its Stratos project in Ector County, Texas, the largest project designed to suck up carbon dioxide directly from the air, as it plans about another 100 plants of the kind.
Occidental’s first large-scale DAC facility is a crucial test of economics for a technology that the International Energy Agency says will play a key role in decarbonizing the global industry, but which has been too costly in early test efforts.
BlackRock's investment shows support for Occidental's ambitious plans on DAC, despite Stratos' repeated construction delays and cost increases in the past couple of years.
DAC strips CO2 from the atmosphere to bury underground or for use in making products such as concrete and aviation fuel. Both Occidental and Exxon Mobil Corp estimate DAC could be a multi-trillion market for oil producers by 2050, as scale brings costs down.
“This joint venture demonstrates that direct air capture is becoming an investable technology," Occidental's chief executive, Vicki Hollub, said in a statement. "BlackRock’s commitment in Stratos underscores its importance and potential for the world."
Occidental on Tuesday increased project costs to $1.3 billion, the second price increase this year. The project was estimated between $800 million and $1 billion in 2022. Its start-up is planned for 2025, from 2024 previously.
Stratos is designed to capture up to 500,000 tonnes of CO2 per year, with construction works expected to employ more than 1,000 people about 30% complete, Occidental said.
BlackRock has signed a definitive agreement to form a joint venture with Occidental through its subsidiary 1PointFive that will own Stratos.
Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, has been endorsing Occidental's plans indirectly, by buying shares and increasing its participation in the company. It currently owns a 25.8% stake worth about $14 billion.
Related News
- Woodside Completes $1.2 Billion Acquisition of Tellurian, Renaming Driftwood LNG to Woodside Louisiana LNG
- Colonial Pipeline Allocates Cycle 59 Shipments on Distillate Line 2, Ensuring Product Flow from Atlanta to Nashville
- California's Largest RNG Plant Opens, Transforming Landfill Gas into Clean Energy
Related News
- Texas Waha Hub Gas Prices Plunge to Record Lows, Hit Negative Territory
- U.S. Appeals Court Strikes Down Controversial Biden Pipeline Safety Rules
- Williams Seeks Emergency Certificate to Operate $1 Billion Mid-Atlantic Gas Pipeline After Court Reversal
- Texas Oil Pipelines Near Max Capacity, Threatening Future Export Limits
- Energy Transfer Subsidiary Selects KTJV for Lake Charles LNG Export Project
- Saudi Arabia Looking to Expand Pipeline to Reduce Oil Exports via Gulf
- Report: Houston Region Poised to Become a Global Clean Hydrogen Hub
- Texas Startup Endeavors Again to Build First Major U.S. Oil Refinery Since 1977
- Puerto Bahia, Gasco to Build Liquefied Petroleum Gas Facility in Cartagena, Colombia
- Ukraine Approves $20 Billion Plan to Boost Renewable Energy to 27% by 2030
Comments