Houston-based Talos Energy Inc. is diving into carbon capture and storage (CCS) opportunities along the Gulf Coast and offshore with UK expert Storegga Geotechnologies Ltd. 


Through the joint venture (JV), the partners plan to “source, evaluate and develop” CCS opportunities on the coast and in the Gulf of Mexico (GOM) offshore Alabama, Louisiana, Mississippi and Texas.

“Engaging in CCS projects along the Gulf Coast and shallow water Gulf of Mexico complements our operating skill set and diversifies the company to seize this significant market opportunity,” Talos CEO Timothy S. Duncan said. “We have a responsibility to deliver affordable, reliable energy with the lowest carbon footprint possible, and this joint venture allows us to expand our impact beyond our own assets to provide solutions for removing emissions from critical industrial sectors in our backyard. 

“We are actively working on a host of ideas and are proud to be an exclusive operating partner with a recognized leader in the rapidly evolving CCS space.”

Storegga is a European CCS specialist and lead developer of the Acorn CCS and Acorn Hydrogen projects in Scotland. It also is developing a direct air capture project. The Acorn project is considered the most advanced large-scale CCS project in the UK, with a final investment decision expected in 2022.

“The rapid deployment of CCS and carbon management value chains requires appropriate geological storage for carbon sequestration, access to emitters and existing infrastructure, and partnerships with experienced, like-minded organizations that share the desire to make this happen,” Storegga CEO Nick Cooper said. 

“The U.S. Gulf Coast offers significant potential for CCS and we are delighted to be partnering with Talos, a leading offshore operator. The joint venture demonstrates the international opportunities for Storegga as an independent developer of CCS infrastructure. We hope that it will be the first of many.”

Under the JV framework Talos and Storegga plan to “originate and mature CCS ventures with emitters, infrastructure providers, service companies and financing partners, among others.”

As individual CCS projects advance, each partner would be “ring-fenced with separate operating agreements, financing structures and the possibility of additional working interest partners.” The agreement requires zero upfront capital commitments, with the partnership sharing costs 50-50 in the initial phases. Talos was designated as the JV operating partner.

The Gulf Coast is home to the largest petrochemical complex in the United States, and a plethora of offshore infrastructure moves oil and natural gas to the onshore. The Gulf Coast facilities emit an estimated 1 million metric tons/year or more of carbon dioxide (CO2).

Considered a prime location for CCS projects, ExxonMobil in April said it was looking for local, state and federal support to build a $100 billion project that would capture CO2 emissions from the Houston Ship Channel petrochemical complex and bury them in the GOM.

In addition to the large industrial companies and conglomerates in the Gulf Coast region, there is “a high density of smaller private and middle-market industrial sites which may require CCS solutions in the future,” Talos and Storegga noted. 

Thel industrial network is adjacent to a “large natural carbon storage province” in the GOM shallow waters. The province, said the partners, has the potential to hold more than “30 gigatons of available storage in geological structures with the necessary rock properties and fluid type to effectively store significant CO2 volumes. 

“With its long history as a prolific energy producing region, the Gulf of Mexico also offers vast infrastructure and service networks, as well as a capable labor force,” Talos and Storegga noted. “These essential technical and commercial elements can supply the growing demand for large-scale CCS emissions solutions in one of the biggest industrial regions in the world.”

Talos in late May established targets to reduce its CO2 emissions as part of its environmental, social and governance (ESG) initiatives. By 2025, it is targeting a 30% reduction in emissions intensity from baseline 2018 levels. 

In addition, ESG-driven metrics have been increased to account for 20% of management’s annual incentive plan (AIP). Key initiatives are aimed at emissions reductions, aligned with health and safety metrics. Additionally, production metrics were eliminated from the AIP scorecard and maximum category payouts were reduced from 200% of targets to 150%.

Talos, which also develops leaseholds offshore Mexico, mostly works in the U.S. GOM where it has an abundance of prospects. In late 2019 it nabbed a bundle of assets worth $640 million to build its U.S. portfolio and exploration prospects.

Talos also is a 25% stakeholder in BP plc’s Puma West prospect offshore Louisiana, which announced a discovery in April. The well in Green Canyon Block 821 is operated and half-owned by BP. Chevron U.S.A. Inc. also has a 25% stake.