Riyadh — The Oil & Gas Climate Initiative's $1 billion-plus Climate Investments fund announced this week it's backing a carbon capture plant to be operated by California Resources Corp. to remove carbon dioxide from its power plant, store it and use it to enhance oil recovery at its Elk Hills field, which accounts for more than half of the state's natural gas production.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The project is scheduled to come on stream in 2024 to remove approximately 1.5 million mt/year of carbon dioxide from burning natural gas at the Elk Hills power plant, Michael Ryan, vice president of carbon capture, use and storage (CCUS) at OGCI Climate Investments, told S&P Global Platts at a CCUS conference in Riyadh this week. He declined to provide the amount of funding.
"The acceleration of CCUS depends upon strong collaboration among policy makers, investors, regulators and developers," Ryan said. "It is exciting to be part of this new and growing CCUS economy in leading CI's investments in CCUS projects and supporting OGCI's development of large CCUS hubs."
The Elk Hills carbon project has received funding from the US Department of Energy and qualifies for a credit under 45Q of the Internal Revenue Service code, Ryan said.
The OGCI Climate Investment fund is backed by major IOCs and NOCs including Saudi Aramco, BP, Chevron, Shell and Total. Elk Hills is the fund's 16th investment and the sixth CCUS investment. Its first project investment was a hub of industrial operations in Teesside, England. It also has CCUS technology investments in low-carbon concrete and cement, polyoils from carbon dioxide and solid-state carbon capture, Ryan said.
The onshore Elk Hills field, located 20 miles west of Bakersfield, produced 52,000 b/d of oil equivalent from more than 3,000 wells in 2018, the latest year available on its website. The field is the largest natural gas and natural gas liquids field in California, generating over half of the state's natural gas production.
Elk Hills Power LLC is a joint venture of CRC and Ares Management LP. It operates gas processing facilities with a combined capacity of 520 MMcf/day of gas. It also operates a 550 MW natural gas combined-cycle power plant that supplies electricity to the Elk Hills field and supplies excess power to a local utility and California's electricity grid.