Oil and gas company Talos Energy has formed an exclusive joint venture with Storegga Geotechnologies to source, evaluate, and develop carbon capture and storage (CCS) project opportunities on the U.S. Gulf Coast and the Gulf of Mexico.
Talos said on Tuesday that the joint venture would also look at CCS project opportunities in state and federal waters offshore Texas, Louisiana, Mississippi, and Alabama.
According to the company, the partners are actively exploring opportunities with counterparties along the CCS value chain.
Under the joint venture framework, Talos and Storegga will originate and mature CCS ventures with emitters, infrastructure providers, service companies and financing partners, among others.
Under the terms of the agreement, as individual CCS projects are matured in the future, each will be ring-fenced with separate operating agreements, financing structures and the possibility of additional working interest partners.
The agreement requires zero upfront capital commitments, and the partnership will share costs 50/50 in the initial phases. Talos is designated as the operating partner of the joint venture.
Worth reminding, Storegga is a lead developer of the Acorn CCS and Acorn Hydrogen Projects and is actively developing a direct carbon air capture project.
Currently, the Acorn project is the most advanced large-scale CCS project in the UK with a final investment decision expected in 2022.
Talos stated that the U.S. Gulf Coast is a prime location for offshore carbon capture projects in the U.S. as the area contains some of the nation’s highest concentrations of power generation, industrial and petrochemical facilities, including over 100 facilities emitting more than 1,000,000 tons of CO2 emissions per year.
In addition to the large industrial multi-national companies and conglomerates present in the region, there is also a high density of smaller private and middle-market industrial sites which may require CCS solutions in the future.
This critical industrial network is immediately adjacent to a large natural carbon storage province located offshore in shallow waters in the Gulf of Mexico which potentially holds over 30 gigatons of available storage in geological structures with the necessary rock properties and fluid type to effectively store significant CO2 volumes.
Talos president and CEO Timothy S. Duncan said: “ We’re excited to announce this joint venture with Storegga and thrilled to partner with their team as they expand into the United States. Engaging in CCS projects along the Gulf Coast and shallow water Gulf of Mexico compliments our operating skill set and diversifies the company to seize this significant market opportunity.
“ We have a responsibility to deliver affordable, reliable energy with the lowest carbon footprint possible, and this joint venture allows us to expand our impact beyond our assets to provide solutions for removing emissions from critical industrial sectors in our backyard.
“ We are actively working on a host of ideas and are proud to be an exclusive operating partner with a recognized leader in the rapidly-evolving CCS space “.
Storegga CEO Nick Cooper added: “ The U.S. Gulf Coast offers significant potential for CCS and we are delighted to be partnering with Talos, a leading offshore operator. The joint venture demonstrates the international opportunities for Storegga as an independent developer of CCS infrastructure. We hope that it will be the first of many “.