Chevron joins Texas offshore CCS project
US major Chevron, through its Chevron New Energies division, said May 3 it had signed a memorandum of understanding (MoU) with Talos Energy and Carbonvert to join an expanded joint venture to develop their Bayou Bend offshore carbon capture and sequestration (CCS) hub project in Texas.
In 2021, Talos and Carbonvert acquired carbon storage lease rights in federal waters offshore Port Arthur and Beaumont, Texas. Now known as the Bayou Bend CCS project, the site encompasses more than 40,000 gross acres, and based on preliminary estimates, could sequester up to 275mn mt of CO2 from industrial sources in the area.
Bayou Bend is the first and only offshore lease in the US dedicated to CO2sequestration.
“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, utilisation, 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.”
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 a final investment decision. Upon closing of the joint venture, equity interests in the joint venture would be 25% Talos, 25% Carbonvert and 50% Chevron, with Talos remaining as operator.
“We believe the addition of Chevron greatly enhances the execution of this hub-scale project and we hope this sends a clear signal to industrial partners in the Beaumont and Port Arthur region that we are focused on making Bayou Bend the premier CCS project in southeast Texas,” Talos CEO Timothy Duncan said.
The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.