Oxy's $1.3B Texas carbon capture facility on track to launch this year

gearing up

Vicki Hollub, president and CEO of Occidental, said the company's Stratos DAC project is on track to begin capturing CO2 later this year. Photo via 1pointfive.com

Houston-based Occidental Petroleum is gearing up to start removing CO2 from the atmosphere at its $1.3 billion direct air capture (DAC) project in the Midland-Odessa area.

Vicki Hollub, president and CEO of Occidental, said during the company’s recent second-quarter earnings call that the Stratos project — being developed by carbon capture and sequestration subsidiary 1PointFive — is on track to begin capturing CO2 later this year.

“We are immensely proud of the achievements to date and the exceptional record of safety performance as we advance towards commercial startup,” Hollub said of Stratos.

Carbon dioxide captured by Stratos will be stored underground or be used for enhanced oil recovery.

Oxy says Stratos is the world’s largest DAC facility. It’s designed to pull 500,000 metric tons of carbon dioxide from the air and either store it underground or use it for enhanced oil recovery. Enhanced oil recovery extracts oil from unproductive reservoirs.

Most of the carbon credits that’ll be generated by Stratos through 2030 have already been sold to organizations such as Airbus, AT&T, All Nippon Airways, Amazon, the Houston Astros, the Houston Texans, JPMorgan, Microsoft, Palo Alto Networks and TD Bank.

The infrastructure business of investment manager BlackRock has pumped $550 million into Stratos through a joint venture with 1PointFive.

As it gears up to kick off operations at Stratos, Occidental is also in talks with XRG, the energy investment arm of the United Arab Emirates-owned Abu Dhabi National Oil Co., to form a joint venture for the development of a DAC facility in South Texas. Occidental has been awarded up to $650 million from the U.S. Department of Energy to build the South Texas DAC hub.

The South Texas project, to be located on the storied King Ranch, will be close to industrial facilities and energy infrastructure along the Gulf Coast. Initially, the roughly 165-square-mile site is expected to capture 500,000 metric tons of carbon dioxide per year, with the potential to store up to 3 billion metric tons of CO2 per year.

“We believe that carbon capture and DAC, in particular, will be instrumental in shaping the future energy landscape,” Hollub said.

From Your Site Articles

1PointFive, a subsidiary of Oxy, was granted the first-ever EPA permits for its large-scale carbon capture and sequestration facility in Texas. Photo via 1pointfive.com

Oxy subsidiary granted landmark EPA permits for carbon capture facility

making progress

Houston’s Occidental Petroleum Corp., or Oxy, and its subsidiary 1PointFive announced that the U.S Environmental Protection Agency approved its Class VI permits to sequester carbon dioxide captured from its STRATOS Direct Air Capture (DAC) facility near Odessa. These are the first such permits issued for a DAC project, according to a news release.

The $1.3 billion STRATOS project, which 1PointFive is developing through a joint venture with investment manager BlackRock, is designed to capture up to 500,000 metric tons of CO2 annually and is expected to begin commercial operations this year. DAC technology pulls CO2 from the air at any location, not just where carbon dioxide is emitted. Major companies, such as Microsoft and AT&T, have secured carbon removal credit agreements through the project.

The permits are issued under the Safe Drinking Water Act's Underground Injection Control program. The captured CO2 will be stored in geologic formations more than a mile underground, meeting the EPA’s review standards.

“This is a significant milestone for the company as we are continuing to develop vital infrastructure that will help the United States achieve energy security,” Vicki Hollub, Oxy president and CEO, said in a news release.“The permits are a catalyst to unlock value from carbon dioxide and advance Direct Air Capture technology as a solution to help organizations address their emissions or produce vital resources and fuels.”

Additionally, Oxy and 1PointFive announced the signing of a 25-year offtake agreement for 2.3 million metric tons of CO2 per year from CF Industries’ upcoming Bluepoint low-carbon ammonia facility in Ascension Parish, Louisiana.

The captured CO2 will be transported to and stored at 1PointFive’s Pelican Sequestration Hub, which is currently under development. Eventually, 1PointFive’s Pelican hub in Louisiana will include infrastructure to safely and economically sequester industrial emissions in underground geologic formations, similar to the STRATOS project.

“CF Industries’ and its partners' confidence in our Pelican Sequestration Hub is a validation of our expertise managing carbon dioxide and how we collaborate with industrial organizations to become their commercial sequestration partner,” Jeff Alvarez, President of 1PointFive Sequestration, said in a news release.

1PointFive is storing up to 20 million tons of CO2 per year, according to the company.

“By working together, we can unlock the potential of American manufacturing and energy production, while advancing industries that deliver high-quality jobs and economic growth,” Alvarez said in a news release.

Here's 1PoinFive's newest customer on its Texas CCUS project. Photo via 1pointfive.com

Oxy's sustainability subsidiary announces DAC agreement with commodities group

new deal

Oxy's carbon capture, utilization and sequestration company announced it's latest carbon dioxide removal credits purchasing agreement with a global commodities group.

Trafigura has agreed to purchase carbon dioxide removal credits to be produced from 1PointFive’s first industrial-scale Direct Air Capture facility, Stratos, that is being built in Texas.

Stratos, which is expected to be the largest facility of its kind in the world, will be configured to be able to capture up to 500,000 metric tons of CO2 annually when fully operational. The captured CO2 underlying Trafigura’s removal credits plan to be stored through durable subsurface saline sequestration.

The advance purchase of DAC credits from 1PointFive will support early-stage technologies to enable high-quality carbon removal credits. The deal can lead to broader adoption of 1PointFive’s CDR credits to help hard-to-abate industries address their emissions.

“We are delighted to collaborate with 1PointFive as we expand our global customer offering for hard-to-abate sectors,” Hannah Hauman, global head of Carbon Trading for Trafigura, says in a news release. “Supporting the development of large-scale removals projects demonstrates our commitment to advancing carbon sequestration technologies, underpinning demand today to enable the scaling of production for tomorrow.”

1PointFive is working to help curb global temperature rise to 1.5°C by 2050 through the deployment of decarbonization solutions, which includes Carbon Engineering's Direct Air Capture and AIR TO FUELS solutions alongside geologic sequestration hubs.

Last November, Canada’s TD Securities investment bank agreed to buy 27,500 metric tons of carbon removal credits from 1PointFive's Stratos, news that followed Amazon's commitment to purchase 250,000 metric tons of carbon removal credits. BlackRock has agreed to pump $550 million into the project, the company reported last fall.

Trafigura continues to invest in renewable energy projects and technologies to facilitate the transition to a low-carbon economy. The company works through joint ventures including H2Energy Europe and Nala Renewables. The deal is Trafigura’s first transaction towards meeting its 2023 goal, as is its commitment as a Founding Member of the First Movers Coalition to purchase at least 50,000 tons of durable and scalable net carbon dioxide removal credits generated through advanced CDR technologies.

Oxy, which broke ground on its DAC project Stratos earlier this year, has secured a $550 million commitment from a financial partner. Photo via 1pointfive.com

Oxy subsidiary gets $550M boost to form new CCUS joint venture

howdy, partner

Occidental Petroleum’s direct air capture (DAC) initiative just got a more than half-a-billion-dollar investment from Blackrock, the world’s largest asset management company.

Houston-based Occidental announced November 7 that on behalf of its investment clients, BlackRock has agreed to pump $550 million into the DAC facility, called Stratos, that Oxy is building in the Midland-Odessa area. The investment will be carried out through a joint venture between BlackRock and Oxy subsidiary 1PointFive, which specializes in carbon capture, utilization, and sequestration (CCUS).

A groundbreaking ceremony for Stratos — being billed as the world’s largest DAC operation — was held in April 2023. Construction is scheduled to be completed in mid-2025. The facility is expected to capture up to 500,000 metric tons of carbon dioxide each year.

Among the organizations that have agreed to buy carbon removal credits from 1Point5 are Amazon, Airbus, All Nippon Airways, TD Bank, the Houston Astros, and the Houston Texans.

Occidental says 1PointFive plans to set up more than 100 DAC facilities worldwide by 2035.

Vicki Hollub, president and CEO of Oxy, says the joint venture with BlackRock demonstrates that DAC is “becoming an investable technology.”

“We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale [DAC],” she says.

DAC removes CO2 from the atmosphere then stores it in underground geological formations.

“Occidental’s technical expertise brings unprecedented scale to this cutting-edge decarbonization technology,” says Larry Fink, chairman and CEO of BlackRock.

He adds that 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.”

1PointFive, Oxy's CCUS subsidiary, has secured a deal that's being billed as among the largest carbon removal credit deals. Photo via oxy.com

Oxy's CCUS subsidiary inks massive carbon removal credit deal

making moves

Canada’s TD Securities investment bank has agreed to buy 27,500 metric tons of carbon removal credits from the 1PointFive subsidiary of Houston-based energy company Occidental Petroleum.

The four-year deal involves 1PointFive’s first direct air capture (DAC) plant, called Stratos, which is under construction in the Midland-Odessa area. The Occidental Petroleum subsidiary specializes in carbon capture, utilization, and sequestration (CCUS). Under this agreement, the captured CO2 underlying the carbon credits will be stored through geologic sequestration.

Financial terms of the deal weren’t disclosed.

Stratos will be capable of capturing and removing up to 500,000 metric tons of CO2 from the atmosphere per year, 1PointFive says.

Michael Avery, president and general manager of 1PointFive, says in a November 1 news release that TD Securities’ purchase of carbon removal credits demonstrates how DAC “can become a vital tool in an organization’s sustainability strategy and help further net-zero goals.”

“Carbon removal credits from [DAC] will be measurable, transparent, and durable, with the goal of providing a solution for organizations to address their emissions,” Avery adds.

The 1PointFive deal is part of TD Securities’ broader decarbonization initiative.

“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,” says Amy West, global head of ESG solutions at TD Securities.

In September, 1PointFive announced a 10-year deal with e-commerce giant Amazon to purchase 250,000 metric tons of carbon dioxide removal credits via Stratos.

Milestone Carbon has leased more that 22,000 acres of land in the Permian Basin for the permanent geologic sequestration of CO2. Photo via milestone-es.com

Innovative Houston-based CO2 capture company gets acquired

M&A moves

Houston-based Milestone Environmental Services announced this month that it has been acquired by affiliates of SK Capital Partners for an undisclosed amount.

The New York-based private investment firm, which specializes in the materials, ingredients, and life sciences sectors, now has a controlling stake of Milestone, which will continue to be led by its president and CEO Gabriel Rio.

Rio founded Milestone in 2014. The company is one of the largest independent providers of waste management services for the U.S. energy and industrial sectors. It focuses on permanent carbon sequestration services through its proprietary slurry injection process, which stores hydrocarbon waste over a mile underground.

The company's subsidiary, Milestone Carbon, is developing injection sites that permanently and securely sequester CO2. Earlier this month, Milestone Carbon announced that it has leased more that 22,000 acres of land in the Permian Basin for the permanent geologic sequestration of CO2 as part of the "sequestration hub" it is developing.

According to the company, once operating, the hub will help reduce emission related to natural gas processing, electricity generation and other industries. It's slated to be one of the first sequestration hubs in the basin.

"We founded Milestone to boldly advance sustainability in the energy industry and beyond," Rios says in a statement. "Our offerings enable companies to reduce their carbon footprint and enhance their ability to meet sustainability goals. Permanent, safe sequestration of carbon is an essential part of combating climate change, and Milestone has the strategy and capabilities to play a leading role in delivering solutions to multiple industries.”

According to a statement, Milestone has sequestered more than 2 million tons of CO2e through its injection process. The company has stated that it believes its sequestration hub will help attract new industries and technologies, hydrogen, low-carbon ammonia, and low-carbon power, to West Texas.

"We are highly impressed with the market-leading, sustainability-driven business that Gabriel and the Milestone management team have built," Jack Norris, a managing director of SK Capital, said in a statement. "It is well-positioned to further grow its core business in difficult-to-abate industries as environmental regulations become more stringent and Milestone’s customers are increasingly focused on meeting ambitious decarbonization targets. We are excited to partner with management to capture this growth opportunity as well as support its further progress towards becoming a leader in CCS and other related markets.”

Earlier this summer, Houston-based Occidental also got in on a carbon capture acquisition. Occidental says its all-cash acquisition of Carbon Engineering is set to close by the end of 2023. The Canada-based company focuses on direct carbon capture (DAC), which vacuums about 50 percent to 60 percent of the carbon dioxide from the air that passes through the system’s fans.

Oxy was granted $600 million from the U.S. Department of Energy to develop South Texas Direct Air Capture (DAC) Hub earlier this year. It’ll be located on about 106,000 leased acres within a Kleberg County site at the iconic King Ranch. The hub will comprise 30 individual DAC projects.

The U.S. Department of Energy also recently invested more than $10 million in funding for four DAC projects with Houston ties.

Ad Placement 300x100

Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Google's $40B investment in Texas data centers includes energy infrastructure

The future of data

Google is investing a huge chunk of money in Texas: According to a release, the company will invest $40 billion on cloud and artificial intelligence (AI) infrastructure, with the development of new data centers in Armstrong and Haskell counties.

The company announced its intentions at a meeting on November 14 attended by federal, state, and local leaders including Gov. Greg Abbott who called it "a Texas-sized investment."

Google will open two new data center campuses in Haskell County and a data center campus in Armstrong County.

Additionally, the first building at the company’s Red Oak campus in Ellis County is now operational. Google is continuing to invest in its existing Midlothian campus and Dallas cloud region, which are part of the company’s global network of 42 cloud regions that deliver high-performance, low-latency services that businesses and organizations use to build and scale their own AI-powered solutions.

Energy demands

Google is committed to responsibly growing its infrastructure by bringing new energy resources onto the grid, paying for costs associated with its operations, and supporting community energy efficiency initiatives.

One of the new Haskell data centers will be co-located with — or built directly alongside — a new solar and battery energy storage plant, creating the first industrial park to be developed through Google’s partnership with Intersect and TPG Rise Climate announced last year.

Google has contracted to add more than 6,200 megawatts (MW) of net new energy generation and capacity to the Texas electricity grid through power purchase agreements (PPAs) with energy developers such as AES Corporation, Enel North America, Intersect, Clearway, ENGIE, SB Energy, Ørsted, and X-Elio.

Water demands

Google’s three new facilities in Armstrong and Haskell counties will use air-cooling technology, limiting water use to site operations like kitchens. The company is also contributing $2.6 million to help Texas Water Trade create and enhance up to 1,000 acres of wetlands along the Trinity-San Jacinto Estuary. Google is also sponsoring a regenerative agriculture program with Indigo Ag in the Dallas-Fort Worth area and an irrigation efficiency project with N-Drip in the Texas High Plains.

In addition to the data centers, Google is committing $7 million in grants to support AI-related initiatives in healthcare, energy, and education across the state. This includes helping CareMessage enhance rural healthcare access; enabling the University of Texas at Austin and Texas Tech University to address energy challenges that will arise with AI, and expanding AI training for Texas educators and students through support to Houston City College.

---

This article originally appeared on CultureMap.com.

Texas A&M's micro-nuclear reactor tops energy transition news to know

Trending News

Editor's note: The top energy transition news of November includes major energy initiatives from Texas universities and the creation of a new Carbon Measures coalition. Here are the most-read EnergyCapitalHTX stories from Nov. 1-15:

1. Micro-nuclear reactor to launch next year at Texas A&M innovation campus

Last Energy will build a 5-megawatt reactor at the Texas A&M-RELLIS campus. Photo courtesy Last Energy.

The Texas A&M University System and Last Energy plan to launch a micro-nuclear reactor pilot project next summer at the Texas A&M-RELLIS technology and innovation campus in Bryan. Washington, D.C.-based Last Energy will build a 5-megawatt reactor that’s a scaled-down version of its 20-megawatt reactor. The micro-reactor initially will aim to demonstrate safety and stability, and test the ability to generate electricity for the grid. Continue reading.

2. Baker Hughes to provide equipment for massive low-carbon ammonia plant

Baker Hughes will supply equipment for Blue Point Number One, a $4 billion low-carbon ammonia plant being developed in Louisiana. Photo courtesy Technip Energies.

Houston-based energy technology company Baker Hughes has been tapped to supply equipment for what will be the world’s largest low-carbon ammonia plant. French technology and engineering company Technip Energies will buy a steam turbine generator and compression equipment from Baker Hughes for Blue Point Number One, a $4 billion low-carbon ammonia plant being developed in Louisiana by a joint venture comprising CF Industries, JERA and Mitsui & Co. Technip was awarded a contract worth at least $1.1 billion to provide services for the Blue Point project. Continue reading.

3. Major Houston energy companies join new Carbon Measures coalition

The new Carbon Measures coalition will create a framework that eliminates double-counting of carbon pollution and attributes emissions to their sources. Photo via Getty Images.

Six companies with a large presence in the Houston area have joined a new coalition of companies pursuing a better way to track the carbon emissions of products they manufacture, purchase and finance. Houston-area members of the Carbon Measures coalition are Spring-based ExxonMobil; Air Liquide, whose U.S. headquarters is in Housto; Mitsubishi Heavy Industries, whose U.S. headquarters is in Houston; Honeywell, whose Performance Materials and Technologies business is based in Houston; BASF, whose global oilfield solutions business is based in Houston; and Linde, whose Linde Engineering Americas business is based in Houston. Continue reading.

4. Wind and solar supplied over a third of ERCOT power, report shows

A new report from the U.S. Energy Information Administration shows that wind and solar supplied more than 30 percent of ERCOT’s electricity in the first nine months of 2025. Photo via Unsplash.

Since 2023, wind and solar power have been the fastest-growing sources of electricity for the Electric Reliability Council of Texas (ERCOT) and increasingly are meeting stepped-up demand, according to a new report from the U.S. Energy Information Administration (EIA). The report says utility-scale solar generated 50 percent more electricity for ERCOT in the first nine months this year compared with the same period in 2024. Meanwhile, electricity generated by wind power rose 4 percent in the first nine months of this year versus the same period in 2024. Continue reading.

5. Rice University partners with Australian co. to boost mineral processing, battery innovation

Locksley Resources will provide antimony-rich feedstocks from a project in the Mojave Desert as part of a new partnership with Rice University that aims to develop scalable methods for extracting and utilizing antimony. Photo via locksleyresources.com.au.

Rice University and Australian mineral exploration company Locksley Resources have joined together in a research partnership to accelerate the development of antimony processing in the U.S. Antimony is a critical mineral used for defense systems, electronics and battery storage. Rice and Locksley will work together to develop scalable methods for extracting and utilizing antimony. Continue reading.

Energy sector AI spending is set to soar to $13B, report says

eyes on ai

Get ready for a massive increase in the amount of AI spending by oil and gas companies in the Houston area and around the country.

A new report from professional services firm Deloitte predicts AI will represent 57 percent of IT spending by U.S. oil and gas companies in 2029. That’s up from the estimated share of 23 percent in 2025.

According to the analysis, the amount of AI spending in the oil and gas industry will jump from an estimated $4 billion in 2025 to an estimated $13.4 billion in 2029—an increase of 235 percent.

Almost half of AI spending by U.S. oil and gas companies targets process optimization, according to Deloitte’s analysis of data from market research companies IDC and Gartner. “AI-driven analytics adjust drilling parameters and production rates in real time, improving yield and decision-making,” says the Deloitte report.

Other uses for AI in the oil and gas industry cited by Deloitte include:

Integrating infrastructure used by shale producers
Monitoring pipelines, drilling platforms, refineries, and other assets
Upskilling workers through AI-powered platforms
Connecting workers on offshore rigs via high-speed, real-time internet access supplied by satellites
Detecting and reporting leaks

The report says a new generation of technology, including AI and real-time analytics, is transforming office and on-site operations at oil and gas companies. The Trump administration’s “focus on AI innovation through supportive policies and investments could further accelerate large-scale adoption and digital transformation,” the report adds.

Chevron and ExxonMobil, the two biggest oil and gas companies based in the Houston area, continue to dive deeper into AI.

Chevron is taking advantage of AI to squeeze more insights from enormous datasets, VentureBeat reported.

“AI is a perfect match for the established, large-scale enterprise with huge datasets—that is exactly the tool we need,” Bill Braun, the company’s now-retired chief information officer, said at a VentureBeat event in May.

Meanwhile, AI enables ExxonMobil to conduct autonomous drilling in the waters off the coast of Guyana. ExxonMobil says its proprietary system improves drilling safety, boosts efficiency, and eliminates repetitive tasks performed by rig workers.

ExxonMobil is also relying on AI to help cut $15 billion in operating costs by 2027.

“There is a concerted effort to make sure that we’re really working hard to apply that new technology … to drive effectiveness and efficiency,” Darren Woods, executive chairman and CEO of ExxonMobil, said during a 2024 earnings call.

View All Listings

ENERGYCAPITALHTX EMAILS ARE AWESOME