Chevron is expanding the scope of its carbon capture and sequestration project located on the Texas Gulf Coast after acquiring nearly 100,000 onshore acres that will increase the project's storage capacity to more than 1 billion mt of CO2, the company announced March 6 during CERAWeek by S&P Global.
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The Bayou Bend CCS project now encompasses nearly 140,000 acres of onshore and offshore space for geologic CO2 sequestration, making it one of the largest carbon storage projects in the US and one of the first in the US Gulf of Mexico, the company said.
Talos Energy and Carbonvert originally developed the project to inject between 225 million mt and 275 million mt of CO2 from industrial sources along the US Gulf Coast over a 25- to 30-year period. Chevron bought a 50% stake in the project last year, and Talos ceded its operator role to Chevron March 1. Talos Energy and Carbonvert each retain a 25% stake.
The 100,000 newly acquired onshore acres are located across Chambers County and Jefferson County, Texas. The original 40,000 acres of offshore shallow water leases are located off the coast of Port Arthur and were obtained through a 2021 Texas General Land Office auction.
The shallow waters of the US Gulf are increasingly considered potentially ideal for CCS projects because of their natural underground storage capacity and proximity to the refining and petrochemical corridor along the Texas and Louisiana coasts. ExxonMobil also has placed bids on nearly 100 leases in Texas' shallow waters for potential CCS projects.
Chris Powers, the vice president of Chevron's energy transition subsidiary Chevron New Energies said that the project is designed to offtake emissions from industry located in Houston to western Louisiana.
"As a Southeast Texas native, I know how vital these industries are to our local communities and their economies," Powers said in a statement. "With this expansion, Bayou Bend is positioned to offer CCUS solutions across a broad region of the Gulf Coast, from Houston to Orange and into western Louisiana."
Although Chevron has not announced a timeline for the project, it has said that its tentative first phase of the project would sequester 4 million-5 million mt/year of CO2, ultimately ramping up to 8 million-10 million mt/year of CO2. It's unclear how the new expansion changes these annual capacity targets.
"This expansion sets us up well to achieve Carbonvert's goal of sequestering 100 million tonnes before 2032 and underscores our position as one of the leading independent, pure-play carbon capture and storage developers in the world," said Carbonvert CEO Alex Tiller. "We are grateful for the opportunity to serve such an important community in Southeast Texas and the greater Gulf Coast economy."
Projects such as this would enjoy increasing demand catalyzed by the expanded tax credits within the Inflation Reduction Act. The enhanced 45Q credits increased carbon capture subsidies from $50/mt of CO2 captured and permanently stored to $85/mt, and from $35/mt of CO2 to $60/mt for companies that utilize CO2 for other purposes, like enhanced oil recovery.
Within the next five years, costs for carbon capture additions are expected to reduce by 15%-30% as the second generation of projects in the pipeline benefit from improved efficiencies and other learnings from the first generation of carbon capture projects, according to the Energy Technology and Innovation practice at S&P Global Commodity Insights.
The twin forces of decreasing costs for CCS technology and increasing policy support are expected to prompt more companies to make carbon capture investments, especially along the Gulf Coast—home to some of the largest emitters in the US.