Page 13 - NorthAmOil Week 13 2021

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NextDecade partnering with Occidental

on CO2 offtake, storage

TEXAS NEXTDECADE announced last week that it underground geologic formation in the Rio
had signed a term sheet with Oxy Low Carbon Grande Valley.
Ventures (OLCV), a subsidiary of Occidental The preliminary partnership comes as
Petroleum, for the offtake and storage of carbon Occidental attempts to expand its own carbon
dioxide (CO2) from the planned Rio Grande business. The producer has long used CO2 in
LNG project in Texas. enhanced oil recovery (EOR), and is now turn-
Houston-based NextDecade anticipates ing its attention to CCS. The company is also
reaching a final investment decision (FID) on at in the process of developing the world’s largest
least two trains at Rio Grande LNG, which will direct air capture (DAC) plant for capturing CO2
be located at the Port of Brownsville, this year. in the Permian Basin.
The company has sought to position Rio “OLCV’s expertise and reliability comple-
Grande as a project that will seek to be as envi- ment the transformative and impactful contri-
ronmentally friendly as possible. In July 2020, butions our NEXT Carbon Solutions business
it announced that it had redesigned the termi- is making to the global energy industry, and
nal to produce 27mn tonnes per year (tpy) of in particular the proprietary processes we are
LNG from five trains instead of six as previously advancing to lower the cost of utilising CCS
planned, resulting in roughly 21% lower CO2 technology,” commented NextDecade’s chair-
equivalent (CO2e) emissions. In October, it man and CEO, Matt Schatzman.
went further, saying it had developed proprietary “Signing this agreement is an important
processes that would reduce Rio Grande’s emis- milestone in scaling up OLCV’s pure seques-
sions by 90%, and adding that it was working on tration business and providing services to help The company has
addressing the remaining 10% in a bid to achieve others achieve their net-zero goals,” added Occi-
carbon neutrality with the project. dental’s president of operations, US onshore sought to position
In mid-March this year, NextDecade resources and carbon management, Richard
announced that it had formed a new subsidi- Jackson. “The CO2 sequestration facility pro- Rio Grande as a
ary, NEXT Carbon Solutions, for the purpose of posed for South Texas is a great example of the
developing a carbon capture and storage (CCS) many sequestration hubs that OLCV plans to project that will
project at Rio Grande LNG. The subsidiary will develop across the United States, and eventually seek to be as
also work on further initiatives, including gen- around the globe.”
erating carbon offsets that other companies Despite NextDecade’s efforts to position environmentally
can use as part of their own efforts to minimise itself as a greener LNG exporter, not everyone
emissions. has viewed the company’s plans favourably. In friendly as
NEXT anticipates that building the CCS pro- November, France’s Engie pulled out of talks
ject at the same time as the LNG terminal will with NextDecade over a supply deal. The fail- possible.
result in 60-80% lower capital costs than retrofit- ure of the talks, for a deal estimated to be worth
ting an existing LNG facility. An FID on the CCS $7bn, followed pressure from the French gov-
project is expected to come shortly after Next- ernment, which has banned hydraulic fracturing
Decade sanctions the first trains at Rio Grande. and did not want a domestic company importing
NextDecade and OLCV still need to nego- gas that had been produced elsewhere using the
tiate a CO2 offtake agreement and a seques- technique.
tration and monitoring agreement. If these are However, NextDecade will be hoping that
finalised, OLCV will offtake and transport CO2 as its CCS plans advance, this will attract other
from Rio Grande LNG for sequestration in an buyers.™

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