Occidental to acquire direct air capture technology company for $1.1 billion

Aug. 15, 2023
An Occidental subsidiary has agreed to acquire all the outstanding equity of Carbon Engineering Ltd. for cash consideration of about $1.1 billion, to be paid in three annual payments, the company said in a release Aug. 15.

An Occidental Petroleum Corp. subsidiary has agreed to acquire all the outstanding equity of Carbon Engineering Ltd. for cash consideration of about $1.1 billion, to be paid in three annual payments, the company said in a release Aug. 15.

The deal provides Occidental, through its 1PointFive subsidiary, “the opportunity to rapidly advance [direct air capture] DAC technology breakthroughs and accelerate deployment of DAC as a large-scale, cost effective, global carbon removal solution,” the operator said.

Carbon Engineering’s DAC-based climate solutions utilize standardized processes and proven industrial equipment, and the two companies have been working together on direct air capture (DAC) deployment since 2019, Occidental said.

Carbon capture technology

Technology that 1PointFive will utilize for its first DAC plant, Stratos, under construction in Ector County in Texas’ Permian basin, is one developed by Carbon Engineering, which absorbs CO2 from the air using potassium hydroxide (KOH) solution (OGJ Online, Aug. 25, 2022).

Stratos is expected to begin operations in mid-2025 and capture up to 500,000 tonnes/year (tpy) of CO2 when fully operational. The first stage of construction, which includes site preparation and road work, has begun.

In addition to acceleration of technology advancements and DAC cost reductions, Occidental president and chief executive officer Vicki Hollub said the partnership adds new revenue streams in the form of technology licensing and royalties and “enables Occidental to catalyze broader development partnerships for DAC deployment in the most capital efficient and valuable way.”

Upon closing, expected before yearend subject to Canadian and US reviews and approvals, Carbon Engineering would become a wholly owned subsidiary of Oxy Low Carbon Ventures. Carbon Engineering’s research and development activities and Innovation Center will remain in Squamish, BC.