LSB Industries has reached an agreement with Lapis Carbon Solutions that creates a pathway for the company to take full ownership of the Project Blue carbon capture and sequestration (CCS) project at its El Dorado, Arkansas facility.
The project, first announced in 2022, is designed to capture and permanently store between 400,000 and 500,000 metric tons of CO2 annually. Construction remains on track for completion by the end of 2026 or early 2027.
LSB Chairman and CEO Mark Behrman said full ownership would provide greater operational control, commercial flexibility and long-term strategic opportunities for the company as the project advances toward operation.
Under the agreement, LSB will acquire 100% ownership of the CCS project through a milestone-based investment structure tied to development, permitting, construction and operational targets. The company said there will be no upfront cash payment at closing.
Total project consideration and remaining completion costs are currently estimated at around $95 million if all milestones are achieved.
Project expected to support low-carbon ammonia production
Once operational, the El Dorado CCS project is expected to generate between $25 million and $30 million in annual earnings and cash flow, excluding CCS operating costs. Captured CO2 will qualify for the US federal 45Q tax credit, which currently provides $85 per metric ton of permanently sequestered carbon dioxide.
The project will also support production of between 305,000 and 380,000 tons of low-carbon ammonia annually, creating potential new revenue opportunities through product premiums and environmental attribute markets.
Relevant: California Launches First Operational Carbon Storage Project
Lapis Carbon Solutions will continue managing Class VI permitting and regulatory engagement with the US Environmental Protection Agency as part of the agreement. The EPA is currently reviewing the project’s injection well permit application, with approval expected later this year.
LSB said the project plans to use a stratigraphic well drilled in 2025 for future CO2 injections once permits are secured.
The El Dorado project is part of a growing wave of industrial carbon capture developments in the US Gulf Coast region, where companies are increasingly pursuing CCS to reduce emissions while producing lower-carbon industrial products.
Read more: Lapis Carbon Solutions Files Class VI Permit For CCS Project In Illinois
