Occidental, ADNOC sign framework agreement for potential Texas DAC investment, Shah field expansion

Occidental Petroleum Corp. and ADNOC have agreed to potentially collaborate on projects both in the US and the United Arab Emirates (UAE).

Occidental subsidiary 1PointFive and XRG, ADNOC’s investment company, agreed to evaluate a potential joint venture to develop a Direct Air Capture (DAC) plant in South Texas.

Occidental and ADNOC also signed a strategic collaboration agreement to explore increasing the production capacity of Shah gas field’s capacity to 1.85 billion standard cu ft/d (bscfd) of natural gas, from 1.45 bscfd, and accelerating the deployment of advanced technologies in the field. 

Direct air capture

XRG will consider investing up to $500 million (one third of the project’s total development cost) for development of such a facility designed to capture 500,000 tonnes/year (tpy) of CO₂.

The framework agreement was signed by Occidental president and chief executive officer Vicki Hollub and ADNOC Group chief executive officer Dr. Sultan Ahmed Al Jaber during US President Donald Trump’s state visit to the United Arab Emirates.

The announcement follows other milestones in the development of DAC, including Occidental’s progress on STRATOS, its first DAC plant in West Texas, which is on-track to start commercial operations in 2025; and an award from the US Department of Energy for up to $650 million to support development of the South Texas DAC Hub, Occidental said in a release May 16 (OGJ Online, Apr. 7, 2025; Sept. 13, 2024).

Occidental and ADNOC have been discussing opportunities to collaborate on carbon capture, utilization and storage projects in the United States and UAE since signing a memorandum of understanding in 2023.

The South Texas DAC Hub, on the King Ranch in Kleberg County, Tex., will be close to industrial and energy infrastructure along the US Gulf Coast, where CO₂ can be transported for use or stored in geologic formations. The site comprises about 165 sq mi of acreage with the potential to store up to 3 billion tonnes of CO₂. The first DAC plant at the Hub is expected to capture 500,000 tpy of CO₂ and is currently in front-engineering and design.

Shah field

ADNOC’s Shah field lies 180 km southwest of Abu Dhabi. The potential expansion will provide more gas for domestic industrial growth and LNG for export, ADNOC said in its May 16 release. 

Occidental holds a 40% participating interest in the field under a 30-year contract that expires in 2041.