Chevron U.S.A., Inc., through its Chevron New Energies division, Talos Energy Inc., through its Talos Low Carbon Solutions division, and Carbonvert, Inc. has announced a memorandum of understanding (“MOU”) for an expanded joint venture to develop the Bayou Bend CCS offshore carbon capture and sequestration hub currently held by Talos and Carbonvert, reads an official press release.
Bayou Bend CCS project
In 2021, a joint venture between Talos and Carbonvert (now known as Bayou Bend CCS) was the winning bidder for the Texas General Land Office’s (“GLO”) Jefferson County, Texas, carbon storage lease, located in state waters offshore Beaumont and Port Arthur, Texas.
The Bayou Bend CCS project site encompasses over 40,000 gross acres and, based on Talos and Carbonvert’s preliminary estimates, could potentially sequester 225 to 275 million metric tons of carbon dioxide (CO2) from industrial sources in the area. The Bayou Bend CCS lease is the first and only offshore lease in the U.S. dedicated to CO2 sequestration.
Under the terms of the MOU, Talos and Carbonvert would contribute the Bayou Bend CCS lease to an expanded joint venture including Chevron in exchange for consideration of cash at closing and capital cost carry through project FID. Upon closing of the joint venture, equity interests in the joint venture would be 25 percent Talos, 25 percent Carbonvert and 50 percent Chevron, and Talos would remain the operator.
Growing lower carbon businesses
“Since our establishment of Chevron New Energies, we have been consistent in our communication that partnership will be required to grow successful lower carbon businesses. This venture is an example of the potential that partnering can have in moving large-scale lower carbon projects forward,” said Chris Powers, vice president of Carbon Capture, Utilization, and Storage (CCUS) for Chevron New Energies.
“Talos and Carbonvert have worked to rapidly advance this project, and as a priority project for Chevron in a key industrial area, we are excited to contribute our experience and capability to develop the leading offshore carbon sequestration hub for the region.”
Targeting carbon emissions reduction
Timothy S. Duncan, president and CEO of Talos said, “Chevron brings significant expertise and experience to this project, and we are excited about what this partnership can deliver.”
“This project is a catalyst that enables dramatic regional carbon emissions reduction to the benefit of local industry, the global community, and future generations,” said Alex Tiller, president and CEO of Carbonvert. “We look forward to the opportunity to partner with Chevron on such a monumental project supporting decarbonization and partnering with customers on their paths to net zero.”
The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.
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Source: Chevron
