Occidental and ADNOC’s XRG Agree to Evaluate Joint Venture to Develop South Texas Direct Air Capture Hub
Occidental (NYSE: OXY) and its subsidiary 1PointFive have signed a Strategic DAC Framework Agreement with XRG, ADNOC's investment company, to evaluate a potential joint venture for developing a Direct Air Capture (DAC) facility in South Texas. XRG will consider investing up to $500 million for the development of a facility designed to capture 500,000 tonnes of carbon dioxide annually.
The South Texas DAC Hub, located on King Ranch in Kleberg County, spans approximately 165 square miles with potential to store up to 3 billion tonnes of CO2. The project has already received up to $650 million in support from the U.S. Department of Energy. The facility will be strategically positioned near industrial facilities and energy infrastructure along the U.S. Gulf Coast for CO2 transportation and storage.
Occidental (NYSE: OXY) e la sua controllata 1PointFive hanno siglato un Accordo Quadro Strategico DAC con XRG, la società di investimento di ADNOC, per valutare una possibile joint venture finalizzata allo sviluppo di un impianto di Cattura Diretta dell'Aria (DAC) nel Sud del Texas. XRG prenderà in considerazione un investimento fino a 500 milioni di dollari per la realizzazione di una struttura progettata per catturare 500.000 tonnellate di anidride carbonica all'anno.
Il South Texas DAC Hub, situato nella King Ranch nella contea di Kleberg, si estende su circa 165 miglia quadrate con la capacità potenziale di immagazzinare fino a 3 miliardi di tonnellate di CO2. Il progetto ha già ottenuto un sostegno fino a 650 milioni di dollari dal Dipartimento dell'Energia degli Stati Uniti. L'impianto sarà posizionato strategicamente vicino a strutture industriali e infrastrutture energetiche lungo la costa del Golfo degli Stati Uniti per il trasporto e lo stoccaggio della CO2.
Occidental (NYSE: OXY) y su subsidiaria 1PointFive han firmado un Acuerdo Marco Estratégico DAC con XRG, la compañía de inversión de ADNOC, para evaluar una posible empresa conjunta para desarrollar una planta de Captura Directa de Aire (DAC) en el sur de Texas. XRG considerará invertir hasta 500 millones de dólares para el desarrollo de una instalación diseñada para capturar 500,000 toneladas de dióxido de carbono anualmente.
El South Texas DAC Hub, ubicado en King Ranch, condado de Kleberg, abarca aproximadamente 165 millas cuadradas con potencial para almacenar hasta 3 mil millones de toneladas de CO2. El proyecto ya ha recibido hasta 650 millones de dólares en apoyo del Departamento de Energía de EE.UU. La instalación estará estratégicamente situada cerca de instalaciones industriales e infraestructura energética a lo largo de la Costa del Golfo de EE.UU. para el transporte y almacenamiento de CO2.
Occidental (NYSE: OXY)와 그 자회사 1PointFive는 ADNOC의 투자 회사인 XRG와 전략적 DAC 프레임워크 계약을 체결하여 텍사스 남부에 직접 공기 포집(DAC) 시설을 개발하기 위한 잠재적 합작 투자를 평가하기로 했습니다. XRG는 연간 50만 톤의 이산화탄소를 포집할 수 있는 시설 개발에 최대 5억 달러를 투자하는 것을 검토할 예정입니다.
텍사스 남부 DAC 허브는 클레버그 카운티의 킹 랜치에 위치하며 약 165평방마일에 걸쳐 있으며 최대 30억 톤의 CO2 저장 가능성을 가지고 있습니다. 이 프로젝트는 이미 미국 에너지부로부터 최대 6억 5천만 달러의 지원을 받았습니다. 이 시설은 미국 걸프 해안의 산업 시설과 에너지 인프라 근처에 전략적으로 위치해 CO2 운송 및 저장에 적합합니다.
Occidental (NYSE : OXY) et sa filiale 1PointFive ont signé un accord-cadre stratégique DAC avec XRG, la société d'investissement d'ADNOC, afin d'évaluer une éventuelle coentreprise pour développer une installation de capture directe de l'air (DAC) dans le sud du Texas. XRG envisagera d'investir jusqu'à 500 millions de dollars pour le développement d'une installation conçue pour capturer 500 000 tonnes de dioxyde de carbone par an.
Le South Texas DAC Hub, situé sur le King Ranch dans le comté de Kleberg, s'étend sur environ 165 miles carrés avec un potentiel de stockage allant jusqu'à 3 milliards de tonnes de CO2. Le projet a déjà reçu un soutien allant jusqu'à 650 millions de dollars du Département de l'Énergie des États-Unis. L'installation sera stratégiquement située à proximité d'installations industrielles et d'infrastructures énergétiques le long de la côte du golfe des États-Unis pour le transport et le stockage du CO2.
Occidental (NYSE: OXY) und seine Tochtergesellschaft 1PointFive haben eine Strategische DAC-Rahmenvereinbarung mit XRG, dem Investmentunternehmen von ADNOC, unterzeichnet, um ein mögliches Joint Venture zur Entwicklung einer Direct Air Capture (DAC)-Anlage in Südtexas zu prüfen. XRG wird eine Investition von bis zu 500 Millionen US-Dollar für die Entwicklung einer Anlage in Betracht ziehen, die darauf ausgelegt ist, jährlich 500.000 Tonnen Kohlendioxid zu erfassen.
Der South Texas DAC Hub, gelegen auf der King Ranch im Kleberg County, erstreckt sich über etwa 165 Quadratmeilen mit dem Potenzial, bis zu 3 Milliarden Tonnen CO2 zu speichern. Das Projekt hat bereits eine Unterstützung von bis zu 650 Millionen US-Dollar vom US-Energieministerium erhalten. Die Anlage wird strategisch in der Nähe von Industrieanlagen und Energieinfrastruktur entlang der US-Golfküste positioniert, um den Transport und die Speicherung von CO2 zu ermöglichen.
- Potential $500 million investment from XRG for the DAC facility development
- Secured up to $650 million in support from the U.S. Department of Energy
- Strategic location near Gulf Coast infrastructure with 3 billion tonnes CO2 storage capacity
- First DAC facility STRATOS in West Texas on track for 2025 commercial operations
- Investment from XRG still under evaluation, not confirmed
- Project still in front-engineering and design phase with no definitive timeline
Insights
Occidental secures potential $500M investment from XRG for carbon capture, strengthening its climate tech leadership position and revenue diversification strategy.
Occidental's agreement with XRG represents a significant financial commitment to its Direct Air Capture (DAC) technology, with XRG potentially investing up to
The strategic importance of this partnership extends beyond the immediate capital infusion. Occidental is positioning itself as a leader in the emerging carbon management market while diversifying revenue streams beyond traditional oil and gas operations. The South Texas location provides strategic advantages with its proximity to industrial facilities along the Gulf Coast and substantial geological storage capacity of up to 3 billion tonnes of CO₂.
This agreement represents the evolution of Occidental's long-term relationship with ADNOC, previously centered on traditional energy development in the UAE. The expansion into carbon capture technology indicates Occidental's commitment to developing new business models that align with global decarbonization trends while leveraging existing expertise in subsurface management and CO₂ handling from its enhanced oil recovery operations.
For investors, this development signals Occidental's strategic foresight in developing commercial-scale DAC technology that could become increasingly valuable as carbon pricing mechanisms mature globally. The company is effectively creating optionality in its business model while potentially generating carbon credits or providing decarbonization services to hard-to-abate industries.
Occidental advances commercial-scale DAC deployment through strategic partnership, positioning for carbon removal market leadership with significant storage capacity.
The framework agreement between Occidental and XRG marks a crucial step forward in the commercialization of Direct Air Capture technology at scale. The proposed 500,000 tonne-capacity facility would represent one of the world's largest DAC installations, significantly expanding the global carbon removal infrastructure beyond current pilot projects.
What's particularly notable is the integrated approach Occidental is taking with its South Texas DAC Hub. The 165 square mile site offers approximately 3 billion tonnes of CO₂ storage capacity in geological formations, creating a complete carbon capture and sequestration solution. This vertical integration gives Occidental a competitive advantage in the emerging carbon management market, as they control both the capture technology and permanent storage solution.
The timeline for implementation appears ambitious but achievable, with their first DAC facility (STRATOS) on track for 2025 operations. This deployment velocity is crucial for technology validation and cost reduction through learning-by-doing. Current DAC technologies face cost challenges (typically
The involvement of XRG, coupled with DOE funding, demonstrates the emerging blended finance model for climate infrastructure—combining public funding, strategic corporate investment, and international capital. This investment model could accelerate deployment of other nascent climate technologies if successful. The project also signals growing confidence in DAC as a necessary component of climate mitigation strategies, complementing emissions reductions by addressing legacy carbon emissions.
XRG to consider investing up to
HOUSTON, May 16, 2025 (GLOBE NEWSWIRE) -- Occidental (NYSE: OXY) and its subsidiary 1PointFive today announced an agreement with XRG, ADNOC’s investment company, to evaluate a potential joint venture to develop a Direct Air Capture (DAC) facility in South Texas. As part of the joint venture, XRG will consider investing up to
The announcement follows several significant milestones in the development of DAC, including Occidental’s progress on STRATOS, its first DAC facility in West Texas, which is on-track to start commercial operations in 2025; further de-risking of Occidental’s DAC technology; and an award from the U.S. Department of Energy for up to
“We are proud to advance our decades-long partnership with ADNOC and XRG on our South Texas DAC Hub, which we believe will deliver game-changing technology to support U.S. energy independence and global goals. Agreements like this, along with U.S. DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas,” said Hollub.
Khaled Salmeen, Chief Operating Officer, XRG, said: “Our longstanding partnership with Occidental continues to drive scalable, high-growth and strategically attractive projects that create long-term sustainable value. The U.S. is a priority market for XRG and we look forward to building on this partnership as we continue to invest in strategic projects across the energy value chain.”
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, located on the King Ranch in Kleberg County, Texas, will be close to industrial facilities and energy infrastructure along the U.S. Gulf Coast, where CO2 can be transported for use or securely stored in geologic formations. The site comprises approximately 165 square miles of acreage with the potential to store up to 3 billion tonnes of carbon dioxide (CO2). The first DAC facility at the Hub is expected to capture 500,000 tonnes of carbon dioxide per year and is currently in front-engineering and design.
XRG focuses on transformational global investments that create value across natural gas, chemicals and lower-carbon energy solutions. Occidental and ADNOC have a long-standing partnership at Al Hosn Gas, one of the largest Middle Eastern natural gas developments, and onshore oil and gas development projects in the UAE.
About Occidental
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil and gas producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of America. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas, and includes our Oxy Low Carbon Ventures subsidiary, which is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. We are dedicated to using our global leadership in carbon management to advance a lower-carbon world.
About 1PointFive
1PointFive is a Carbon Capture, Utilization and Sequestration (CCUS) company that is working to help curb global temperature rise to 1.5°C through the deployment of decarbonization solutions, including Carbon Engineering's Direct Air Capture and AIR TO FUELS™ solutions alongside geologic sequestration hubs. Visit 1PointFive.com for more information.
AIR TO FUELS™ is a registered trademark of Carbon Engineering ULC.
About XRG
XRG is a transformative international energy investment company, focused on lower-carbon energy and chemicals, and headquartered in Abu Dhabi. Wholly owned by ADNOC, XRG has an enterprise value of over
To find out more, visit: www.xrg.com
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including those relating to the agreement’s benefits and related impact on carbon emissions and Occidental’s and 1PointFive’s deployment and use of DAC technology, which are based on Occidental’s current expectations, beliefs, plans, estimates, and forecasts. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. Words such as “believe,” “will,” “may,” “expect,” “plan,” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Occidental does not undertake any obligation to update, modify, or withdraw any forward-looking statements as a result of new information, future events, or otherwise.
These statements are not guarantees of future performance as they involve assumptions that may prove to be incorrect and risks and uncertainties, including those that are beyond Occidental’s control. Factors that may cause actual results to differ materially from forward-looking statements include Occidental’s and 1PointFive’s ability to access necessary technology, to develop and employ existing or new technology on a commercial scale, to access capital, to collaborate with third parties and customers, and to receive approvals from regulatory bodies, as well as market conditions, geopolitical events, and scientific developments. Additional factors that may affect the agreement’s benefits and related impact on carbon emissions and Occidental’s and 1PointFive’s deployment and use of DAC technology can be found in Occidental’s public disclosure and its filings with the U.S. Securities and Exchange Commission (SEC), which may be accessed at Occidental’s website at oxy.com or the SEC’s website at sec.gov. Information included herein is not necessarily material to an investor in Occidental’s securities.
Contacts
| Occidental Media | Occidental Investors |
| Eric Moses 713-497-2017 eric_moses@oxy.com | R. Jordan Tanner 713-552-8811 investors@oxy.com |
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