BlackRock Invests $550M In Occidental Direct Air Capture Plant 

Stratos, Occidental's First DAC Plant Is 70% Complete - Carbon Herald
Artist rendering of the facility in Ector County, TX. Image: www.1pointfive.com

Occidental announced on Nov. 7 that BlackRock will invest $550 million on behalf of clients in the development of STRATOS, the world’s biggest Direct Air Capture (DAC) plant, in Ector County, Texas. 

BlackRock, through a fund managed by its Diversified Infrastructure business, has entered into a definitive agreement with Occidental, through its subsidiary 1PointFive, to form a joint venture that will own STRATOS.

The investment follows several developments in the direct air capture space. With the technology identified as a key part of the solution for removing CO2 emissions, the government announced a $1.2 billion funding package for two DAC hubs in Texas and Louisiana in August.

This was quickly followed by the formal announcement of Occidental’s $1.1 billion acquisition of Carbon Engineering, a DAC company that underpins STRATOS and the broader push of the oil company into direct air capture.

STRATOS is designed to capture up to 500,000 metric tons of carbon annually. The DAC facility is currently at approximately 30% completion in its construction phase, with expectations of becoming commercially operational by mid-2025. The project is projected to create job opportunities for over 1,000 people during construction and up to 75 once it is operational.

Relevant: Occidental Begins Work On The World’s Largest Direct Air Capture Plant

“We are excited to partner with BlackRock on this transformative facility that will provide a solution to help the world reach net zero,” said Vicki Hollub, President and CEO, of Occidental. The joint venture demonstrates that DAC is becoming an investable technology, she also said, adding that BlackRock’s extensive experience in global markets and industries positions them as the perfect partner to advance industrial-scale Direct Air Capture.

“BlackRock is proud to partner with global energy leader Occidental to help build the world’s largest direct air carbon capture facility in Texas,” said Larry Fink, Chairman and CEO, BlackRock, explaining that Occidental’s technical expertise adds significant scale to decarbonization technology. STRATOS offers an investment opportunity for BlackRock clients, highlighting the role of American energy companies in climate technology innovation, Fink also said.

2023 has seen several high profile pre-purchase agreements announced by 1PointFive with corporate buyers lining up to buy carbon credits. Amazon, Airbus, All Nippon Airways, TD Bank Group and local sport franchises the Houston Texans and Astros have all bought credits, with the most notable deals being 400,000 credits for Airbus and 250,000 for Amazon.

The BlackRock joint venture comes at a pivotal time for the industry with the investment company opening an avenue for funding from a broader range of backers. With it STRATOS’ role as a poster child for this approach to DAC is solidified and it will likely serve as a blueprint for growing the industry at scale with prospects of hundreds or even thousands of similar plants across the world.

Read more: Amazon To Buy 250,000 Tons Of Direct Air Capture Credits From 1PointFive

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