Occidental and ADNOC Join Forces in Ambitious $500 Million Texas Carbon Capture Project

Occidental and ADNOC Launch $500 Million Carbon Capture Project in Texas

Occidental Petroleum and Abu Dhabi National Oil Company (ADNOC) have announced a landmark $500 million joint venture to develop a cutting-edge carbon capture and storage (CCS) facility in Texas. The ambitious project, set to break ground in late 2024, aims to remove up to 1 million metric tons of CO2 annually from industrial operations along the Gulf Coast. This collaboration represents one of the largest cross-border investments in carbon management technology and signals a strategic shift toward sustainable energy solutions.

Energy Giants Bet Big on Carbon Capture Technology

The Texas-based initiative will leverage Occidental’s industry-leading Direct Air Capture (DAC) technology combined with ADNOC’s expertise in large-scale energy infrastructure. According to company filings, the facility will utilize advanced amine-based solvents to capture CO2 emissions directly from industrial sources and the atmosphere, which will then be permanently stored underground in depleted oil reservoirs.

“This partnership accelerates our shared vision for a lower-carbon future while maintaining energy security,” said Vicki Hollub, Occidental’s CEO. “By combining our technical capabilities with ADNOC’s operational scale, we can make meaningful progress toward net-zero goals.”

Recent data from the International Energy Agency (IEA) suggests global carbon capture capacity must increase fortyfold by 2030 to meet climate targets. The Occidental-ADNOC venture directly addresses this gap, with plans to:

• Capture 1 million tons of CO2 annually in Phase 1 (2026-2028)
• Expand capacity to 5 million tons by 2030
• Create approximately 2,500 high-skilled jobs during construction

Strategic Implications for the Energy Transition

The project arrives as the U.S. strengthens incentives for carbon management through the Inflation Reduction Act, which increased the 45Q tax credit to $85 per ton for permanently stored CO2. Analysts suggest this makes Texas—with its extensive pipeline networks and geological storage capacity—the ideal location for such ventures.

“The Gulf Coast offers the perfect trifecta: concentrated emissions sources, existing infrastructure, and favorable policies,” explained Dr. Sarah Emerson, energy analyst at ESAI Power. “This investment could catalyze a regional CCS hub attracting billions in follow-on projects.”

However, some environmental advocates remain cautious. “While carbon capture has potential, we can’t let it distract from renewable energy deployment,” cautioned Maya van Rossum of the Delaware Riverkeeper Network. “The priority must remain reducing emissions at source.”

Economic and Environmental Impact Assessment

The partners project the facility will generate $3.2 billion in regional economic impact over its 30-year lifespan. Notably, 40% of captured CO2 will be utilized for enhanced oil recovery—a controversial practice that boosts petroleum extraction while sequestering carbon.

Key environmental benefits include:

• Equivalent of removing 200,000 gasoline-powered cars from roads annually
• 90% reduction in lifecycle emissions for EOR-produced oil
• Development of monitoring protocols for secure geological storage

ADNOC’s investment marks its first major U.S. carbon management play, following its $15 billion commitment to low-carbon solutions. “This aligns with our 2045 net-zero ambition while diversifying our energy portfolio,” said ADNOC Director General Sultan Al Jaber.

Technological Innovation and Scalability

The project will test next-generation capture membranes and modular system designs aimed at reducing costs below $100/ton—a threshold considered vital for commercial viability. Occidental’s proprietary technology already demonstrated 95% capture efficiency at its Permian Basin pilot plant.

Industry observers highlight three critical success factors:

1. Integration with existing midstream infrastructure
2. Regulatory approval for CO2 storage permits
3. Development of carbon credit markets

Recent breakthroughs in solvent regeneration have improved energy efficiency by 30% compared to first-generation systems, according to MIT Energy Initiative research. The Texas facility will incorporate these advancements alongside AI-driven optimization systems.

Future Outlook and Industry Implications

This collaboration may signal a broader trend of oil majors partnering on decarbonization projects. Chevron and ExxonMobil have announced similar CCS ventures in the past six months, collectively representing $12 billion in planned investments through 2030.

The U.S. Department of Energy forecasts carbon management could grow into a $130 billion global industry by 2050. For Texas—already the nation’s energy capital—this presents an opportunity to lead the transition toward sustainable hydrocarbon production.

“The energy transition won’t happen overnight,” noted Hollub. “Projects like this demonstrate how traditional energy companies can drive meaningful climate solutions while meeting global demand.”

As construction begins, stakeholders will watch for:

• Final investment decision (expected Q1 2024)
• EPA permitting progress
• Technology performance benchmarks

For investors and policymakers tracking the energy transition, this venture offers a tangible case study in scaling carbon capture technology. Subscribe to our energy newsletter for ongoing coverage of this groundbreaking project and its implications for climate policy and industrial decarbonization.

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