Occidental, Blackrock Form JV for Texas DAC Facility

Occidental Petroleum Corp subsidiary 1PointFive and Blackrock Inc, through a fund managed by its Diversified Infrastructure business, are forming a joint venture that will own Stratos, a Direct Air Capture (DAC) facility in Ector Country, Texas.

Blackrock will invest $550 million on behalf of clients in the development of Stratos, “the world’s largest DAC facility”, Occidental said in a statement Tuesday. The facility is designed to capture up to 500,000 metric tons of carbon dioxide per year. Construction activities for STRATOS are approximately 30 percent complete, Occidental noted, with the facility expected to be commercially operational in mid-2025.

DAC is a technology that captures and removes large volumes of carbon dioxide directly from the atmosphere and then stores it deep underground in geologic formations. Stratos is expected to provide cost-effective solutions that companies in hard-to-decarbonize industries can use in conjunction with their own emissions reduction programs, Occidental said.

“We are excited to partner with BlackRock on this transformative facility that will provide a solution to help the world reach net zero”, Occidental President and CEO Vicki Hollub said. “This 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. We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale Direct Air Capture”.

“BlackRock is proud to partner with global energy leader Occidental to help build the world’s largest direct air carbon capture facility in Texas”, BlackRock Chairman and CEO Larry Fink said. “Occidental’s technical expertise brings unprecedented scale to this cutting-edge decarbonization technology. STRATOS represents an incredible investment opportunity for BlackRock’s clients to invest in this unique energy infrastructure project and underscores the critical role of American energy companies in climate technology innovation”.

To date, 1PointFive has signed carbon dioxide removal credit purchase agreements with several customers, including Amazon, Airbus, All Nippon Airways (ANA), TD Bank Group, the Houston Astros, and the Houston Texans, according to the statement.

TD Purchases CDR Credits

Earlier in the month, 1PointFive and TD Bank Group (TD) announced a purchase of carbon dioxide removal (CDR) credits from Stratos. Under the terms of the agreement, and subject to STRATOS becoming operational, TD Securities agreed to purchase 27,500 metric tons of DAC CDR credits over four years, representing “one of the largest purchases of DAC CDR credits by a financial institution and demonstrates TD’s continuing strategic focus on energy transition”, Occidental said in a separate news release.

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With the transaction, TD Securities expects to add to its portfolio of voluntary carbon offsets, as it continues to build out its carbon advisory and trading capabilities in the voluntary and compliance carbon markets. Further, TD intends to use a portion of the credits from this transaction to offset its own operational emissions, according to the release.

“As the need to move from climate commitments to action intensifies, corporations across all sectors are looking for tangible ways to achieve their net zero goals”, TD Securities Global Head for ESG Solutions Amy West said. “We’re incredibly proud to partner with 1PointFive to support innovative, technology-based solutions that are intended to advance both our clients’ and our own decarbonization goals”.

“We are proud to partner with TD Securities and believe their purchase demonstrates how Direct Air Capture can become a vital tool in an organization’s sustainability strategy and help further net-zero goals”, 1PointFive President and General Manager Michael Avery said. “Carbon removal credits from Direct Air Capture will be measurable, transparent, and durable, with the goal of providing a solution for organizations to address their emissions”.

“The transition to a low-carbon economy is complex and relies on transformative action across sectors and economies, including the adoption of new technologies”, TD SVP for Sustainability and Corporate Citizenship Janice Farrell Jones said. “Direct Air Capture holds enormous promise as a tool to drive progress on this journey and we are proud to play a role, helping to scale innovation and support this growing business opportunity”.

In October, 1PointFive, and ADNOC signed an agreement to start a jointly funded preliminary engineering study for a similar DAC facility in the United Arab Emirates, with a capacity of one million tons per year.

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