Equinor ASA has acquired a 25 percent stake in a 140,000 gross acre North American carbon capture and storage (CCS) project.
“Bayou Bend is positioned to be one of the largest CCS solutions in the United States for industrial emitters, with nearly 140,000 gross acres of pore space for permanent CO2. [carbon dioxide] sequestration and gross potential storage resources of more than one billion metric tons,” the Norwegian company said in a press release. The area consists of 100,000 acres in Chambers and Jefferson counties and about 40,000 in the towns of Beaumont and Port Arthur.
The project is operated by Chevron USA Inc. with a 50% stake through its Chevron New Energies division, while Talos Energy Inc. it holds 25% through its Talos Low Carbon Solutions division. Equinor has joined through the purchase of the subsidiary of Carbonvert Inc. Texas Carbon 1 LLC, which held the remaining 25 percent.
Chris Golden, Equinor’s senior vice president and US country manager, said in the announcement, “Bayou Bend is the first low-carbon solutions project announced by Equinor on the Gulf Coast.”
“Along with our upstream production and offshore wind developments, we are strengthening our position as a comprehensive energy company and expanding our footprint in the Gulf region,” Golden said. “Bayou Bend is a significant milestone in growing our low-carbon portfolio in the US.”
Bayou Bend is the first US offshore lease for CO2 sequestration, according to Chevron.
“The project’s location near major industrial corridors in the Houston Ship Channel and the Beaumont/Port Arthur area will provide a potential decarbonization option for industries such as refining, cement, steel, chemicals and manufacturing,” the statement said. “Industrial emissions in the Texas Gulf Coast region are estimated to be approximately 100 million metric tons of CO2 per year.”
Grete Tveit, senior vice president of low-carbon solutions at Equinor, said the entry into Bayou Bend supports the state-owned company’s goal of developing 15 to 30 million metric tons of transportation capacity and CO2 storage per year by 2035.
“Our expertise in developing carbon storage projects can help advance decarbonization efforts in one of the largest industrial corridors in the US,” Tveit added.
Chris Powers, Chevron New Energies vice president for carbon capture, utilization and storage, commented, “Delivering lower carbon solutions to the hardest-to-reduce industries is central to Chevron New Energies’ mission, and as a Native from Southeast Texas, I know how to do it. These industries are vital to our local communities and their economies.”
Carbonvert said in a separate press release: “The acquisition of Equinor fuels the continued expansion of the CCS sector and enables Carbonvert to scale and develop its extensive CCS project.”
“Carbonvert believes that stakeholders in the Golden Triangle and Houston Ship Channel will benefit from Equinor’s involvement in the Bayou Bend project, including its track record of maintaining the highest levels of integrity with the communities they serve.”
Neither Carbonvert nor Equinor disclosed the value of the transaction.
Carbonvert and Talos, both based in Houston, Texas, were the original project awardees. A September 3, 2021, Texas government news release about the award said Bayou Bend is “the first carbon sequestration project of its kind that will enable the storage of offshore carbon dioxide on land submerged near Jefferson County, near Port Arthur.”
Chevron acquired its operating stake last year for $50 million gross. The amount consisted of “$30 million of gross upfront cash and up to $20 million of gross capital cost reimbursement, which was expected to cover Talos and Carbonvert’s capital expenditures through the final investment decision of the project,” San Ramon, Calif.-based Chevron said on May 24, 2022. .
To contact the author, please email jov.onsat@rigzone.com
