Occidental Petroleum Corp's OXY subsidiary 1PointFive inked a deal with ADNOC to start a jointly funded preliminary engineering study for a 1 million tonne-per-year Direct Air Capture (DAC) facility in the UAE.
The study will evaluate the feasibility of building the first megaton-scale DAC facility outside the U.S. using the same CO2 extraction technology to be deployed in constructing plant 1PointFive in Texas.
The Texas facility, named Stratos and developed to include DAC technology by Canada-based Carbon Engineering, is anticipated to capture up to 500,000 tonnes of CO2 annually when fully operational.
Since the companies signed a memorandum of understanding (MOU) on August 1, 2023, the DAC facility agreement is the first project they announced for exploring carbon capture projects in the U.S. and the UAE.
The MOU is expected to mobilize $100 billion in clean energy and carbon management projects, including CCS and DAC, by 2035.
"This agreement demonstrates how Oxy and ADNOC are committed to advancing direct air capture technology in the UAE and underscores the necessary urgency needed to deliver global-scale climate solutions. We will continue leveraging our carbon management expertise to deliver value, engage committed partners and accelerate our ability to achieve our net-zero targets and help others meet theirs," said OXY's Vicki Hollub, President and CEO.
Related: Occidental Petroleum Inks $1.1B Acquisition Deal To Accelerate Net-Zero Strategy
If the UAE project is approved, CO2 extracted at the DAC facility will be connected to ADNOC's CO2 infrastructure in Abu Dhabi for injection and permanent storage into saline reservoirs.
"Today's announcement represents continued positive momentum in our partnership with Occidental to significantly scale up promising carbon management technologies. This joint investment in the proposed first megaton direct air capture facility in the region exemplifies ADNOC's commitment to leverage partnerships and promising technology to accelerate our decarbonization journey on the way to net zero by 2045," commented Musabbeh Al Kaabi, Executive Director for Low Carbon Solutions and International Growth at ADNOC.
Price Action: OXY shares are trading lower by 0.16% at $62.20 premarket on the last check Tuesday.
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