Occidental Petroleum Corp. and Enterprise Products Partners LP are throwing their hats into the ring for a carbon dioxide (CO2) transportation and sequestration hub that would serve oil and gas operators in the Greater Houston area.
Oxy, as it is better known, said Oxy Low Carbon Ventures LLC (OLCV) signed a letter of intent with Enterprise Products Operating LLC for the hub. If it were to proceed, the hub initially would provide services to “emitters in the industrial corridors from the Greater Houston to Beaumont/Port Arthur areas,” the companies said.
The Houston-based companies said the project would “combine Enterprise’s leadership position in the midstream energy sector with OLCV’s extensive experience in subsurface characterization and CO2 sequestration.”
Enterprise’s Jim Teague, co-CEO of the general partner, said, “For many years, Enterprise and Oxy have successfully collaborated in developing traditional oil and gas projects.”
“We are excited to evolve that relationship with OLCV to provide reliable and cost-efficient CO2 transportation and sequestration services to advance a low-carbon economy for the energy capital of the world.”
The proposed deal with Oxy follows one between Enterprise and Chevron Corp. announced last September. Chevron and Enterprise are evaluating possible carbon sequestration projects for the Gulf Coast and in the Midcontinent.
Meanwhile, ExxonMobil is spearheading a $100 billion proposed carbon capture utilization and storage (CCUS) project to pull emissions from the industrial complex along the Houston Ship Channel.
Last spring Talos, partnering with Carbonvert Inc., captured the sole winning bidder in a Texas General land Office sale for a CCUS site in Jefferson County, east of Houston. In October, an alliance with TechnipFMC was announced to consider potential Gulf Coast projects. And in November, Talos announced a preliminary agreement with Freeport LNG, a liquefied natural gas export facility south of Houston, to sequester emissions.
Under the proposal with OLCV, Enterprise would develop the CO2 aggregation and transportation network using “a combination of new and existing pipelines along its expansive Gulf Coast footprint.”
OLCV, through its 1PointFive business unit, already is developing sequestration hubs on the Gulf Coast and across the United States. Some of the hubs, including in the Permian Basin, are expected to be anchored by Oxy’s proposed direct air capture (DAC) facilities. Oxy is expected to soon sanction a massive DAC project in the Permian Basin, which basically would suck CO2 from the air.
In March, Oxy clinched its first agreement regarding the Permian DAC facility. It agreed to sell 200,00 b/d of net-zero emissions oil over five years to South Korea’s SK Trading International once the project has begun operations.
The net-zero emissions oil would be achieved by combining with environmental attributes, which would be generated by removing and sequestering the atmospheric CO2 through an enhanced oil recovery (EOR) process.
The hubs, as designed by Oxy, would provide access to pore space and transportation infrastructure. The partners said the hub infrastructure would offer “more options to emitters looking to explore viable carbon management strategies.”
As envisioned, up to 1 million metric tons/year (mmty) of CO2 emissions could be pulled from the air using the DAC system. That would equal around 5% of what Oxy sequesters every year through its EOR business.
Enterprise and OLCV said they have begun exploring how to commercialize the potential joint service offering with customers.
“We believe that our low-carbon strategy enhances Oxy’s business value and creates a path to net zero for ourselves while providing organizations everywhere with the tools they need to achieve net-zero or net-negative emissions,” said Oxy’s Richard Jackson, president, U.S. Onshore Resources and Carbon Management, Operations.
Rystad Energy on Tuesday said North America and Europe would dominate the CCUS market by 2030. The firm estimated the two regions would contribute 450 mmty of capture capacity, which would be “more than 80% of the projected global total of 550 mmty.”
“Economic and financial constraints are the main reason for CCUS projects not moving ahead as planned, but more countries are starting to see the importance of providing support to such projects,” the Rystad team said. “Demand for carbon capture projects through to 2030 will be predominantly driven by policies and support, especially for hard-to-decarbonize sectors such as cement, steel, maritime and chemicals.”
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 | ISSN © 2158-8023 |