Chevron USA Inc., through its Chevron New Energies division, signed a memorandum of understanding (MOU) with Talos Energy Inc., through its Talos Low Carbon Solutions division, and Carbonvert Inc. to join the companies in an expanded joint venture to develop the Bayou Bend CCS offshore Texas carbon capture and sequestration (CCS) hub.
In 2021, a joint venture between Talos and Carbonvert (Bayou Bend CCS) won the bid for the Texas General Land Office's Jefferson County, Tex. carbon storage lease in state waters offshore Beaumont and Port Arthur (OGJ Online, Aug. 25, 2021). Based on Talos's preliminary understanding of the rock and fluid properties of 40,000-gross acre site’s saline reservoirs, it expects to ultimately sequester 225-275 million tonnes of carbon dioxide (CO2) from industrial sources in the area.
Under the terms of the MOU, Talos and Carbonvert would contribute the Bayou Bend CCS lease to an expanded JV including Chevron in exchange for consideration of cash at closing and capital cost carry through final investment decision (FID). Upon closing of the JV, equity interests would be 25% Talos, 25% Carbonvert, and 50% Chevron. Talos would remain as operator.
Creation of the proposed JV is subject to negotiation of definitive agreements with customary closing conditions, including regulatory approval.