US energy company Occidental has signed an agreement with XRG, the investment arm of UAE state-owned Adnoc, to develop a direct air capture (DAC) plant in South Texas capable of removing 500,000 tonnes of carbon dioxide per year.
As part of the joint venture, XRG could invest up to $500m to support the development of the site, which has the potential to store up to three billion tonnes of CO2.
The site will be located close to industrial facilities and energy infrastructure along the US Gulf Coast, where CO2 can be transported for use or stored in geologic formations.
Occidental and Adnoc have been exploring collaboration on carbon capture, utilisation, and storage (CCUS) projects in the US and UAE since signing a memorandum of understanding in 2023.
XRG has described the US as a “priority market” for the investment firm.
Vicki Hollub, President and CEO of Occidental, said she believes the facility will deliver “game-changing” technology to support US energy independence.
“Agreements like this, along with US Department of Energy support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the US and Texas.”
According to the International Energy Agency (IEA), 27 DAC plants are currently operating worldwide, but capturing tiny volumes of CO2 currently. Around 130 larger projects are in development, each aiming to capture over 1,000 tonnes annually.
