U.S. oil and gas company Talos Energy, focused on oil and gas assets in the Gulf of Mexico, said Wednesday it was its partners Carbonvert, the sole winning bidder for the Texas General Land Office's ("GLO") Jefferson County, Texas carbon storage site located near Beaumont and Port Arthur, Texas.
Talos said its bid was selected as the only successful proposal among twelve submissions and the Texas School Land Board unanimously approved awarding the lease to Talos and Carbonvert, subject to finalization of lease terms.
The carbon storage site covers a total land area of over 40,000 gross acres and is located offshore in Texas state waters in the Gulf of Mexico.
According to Talos, the Project Site is 100% covered by Talos Energy's existing seismic database and is located in close proximity to a large concentration of industrial emitters along the Texas and Louisiana Gulf Coast.
"Based on Talos's preliminary understanding of the rock and fluid properties of the saline reservoirs of the project site, the company expects it can ultimately sequester approximately 225 to 275 million metric tons of carbon dioxide from industrial sources in the area. Talos will be the operator of this project," Talos said.
Talos President and Chief Executive Officer Timothy S. Duncan said: "This is an exciting announcement for Talos and Carbonvert as we advance our carbon capture initiative from concept towards our first tangible project site. With this award, we are positioned to become among the first independent U.S. energy companies with an identified site dedicated to carbon sequestration, further advancing our leadership among peers in this rapidly-developing space.
"The Project Site possesses favorable geological characteristics and close commercial proximity to support an attractive project in the future. This is the first of several steps in our strategy to build multiple carbon capture and storage sites along the United States Gulf Coast where we can use Talos's core competencies to operate these important projects."
Duncan said the company wanted to redefine the role of traditional oil and gas companies, "as we recognize the need to responsibly develop and produce hydrocarbons as well as lowering overall emissions in the communities where we work and live."
The process will now enter into an exclusive phase where Talos and Carbonvert will negotiate a lease agreement with the GLO staff based on the terms of the Talos bid and the terms included in the original request for proposal from the GLO. Final terms are subject to the approval of the Texas School Land Board.
The Company's proposal was submitted in partnership with Carbonvert, a carbon capture and storage-focused project management company founded in late 2020 by renewable and conventional energy industry veterans.
To remind, Talos in June said it had formed an exclusive joint venture with the European carbon capture and storage firm Storegga to source, evaluate, and develop carbon capture and storage ("CCS") project opportunities in the United States Gulf Coast and the Gulf of Mexico.
This Talos-Carbonvert carbon storage site bid submission pre-dates the Storegga JV.
"Talos continues to work with both landowners and emitters across the Gulf Coast to move forward additional carbon capture and sequestration sites," Talos said.
Carbon Capture Utilization and Storage has been described as one of the key pillars in the energy transition process and towards the net-zero emissions path.
According to the International Energy Agency, after years of a declining investment pipeline, since 2017, plans for more than 30 new integrated CCUS facilities have been announced.
The majority of the projects will be in the United States and Europe, but there are also plans for projects in Australia, China, Korea, the Middle East, and New Zealand.
Per IEA, if all of these projects go ahead, global CO2 capture capacity will more than triple, reaching roughly 130 Mt/year.
IEA said in April that 16 projects at advanced stages of planning, including several facing a final investment decision (FID) within the next 12 months, represented a total estimated investment of more than USD 27 billion, almost double the investment in projects commissioned since 2010 and around 2.5 times the planned investment in projects at a similar stage of development in 2017.