San Antonio-based Ozona CCS LLC has entered a deal to expand its carbon capture sequestration (CCS) capabilities for oil and gas operators in the Permian basin of West Texas.
Ozona has signed a definitive agreement with a private landowner in Loving County, Tex., to lease about 5,723 contiguous acres of pore space for the purpose of drilling multiple commercial carbon dioxide (CO2) sequestration wells to increase its Permian lease position to more than 10,000 contiguous acres with estimated pore space capacity of 120 million tonnes, the company said on Oct. 4.
With the agreement now in place, Ozona said it will start the federal and state permitting process to drill and operate multiple CO2 disposal wells across its acreage position, with each to have an initial injection rate of 25,000 b/d.
Rich Adams, Ozona’s co-chief executive and chief operating officer, said initial anchor customers will include existing Permian natural gas processing plants, other regional oil and gas operators, as well as industrial and power generation under development in the area.
Further details regarding initial anchor commitments were not disclosed.
Projects seeking to inject CO2 into formations for permanent storage are subject to the Environmental Protection Agency’s (EPA) Class VI Rule and must obtain a Class VI permit, which governs injection of CO2 into deep rock formations for long-term storage.
Pending requisite EPA permitting approvals, Ozona anticipates the target in-service date for its Class VI wells sometime during first-quarter 2026.
Additional Permian acreage
This latest land-lease agreement follows Ozona’s previous deal signed earlier this year with Texas Pacific Land Corp. (TPL) to lease about 5,173 contiguous acres of land in the Permian for drilling one of the first commercial CO2 sequestration wells in the region, Ozona said on Jan. 31.
The operator said its proposed CO2 disposal well on TPL land—scheduled to be in-service during third-quarter 2024—is to have an estimated initial injection rate of up to 25,000 b/d and an estimated total storage capacity of at least 40,000,000 metric tons of CO2.