Occidental (NYSE: OXY) and ADNOC announced earlier today that the two companies will work together on evaluating the investment potential of Direct Air Capture (DAC) projects and CO2 sequestration hubs in both the United States and the United Arab Emirates (UAE).
The partnership could reveal some of the largest opportunities in the carbon management sector globally, as the two countries have some of the most developed oil and gas industries, for which net-zero will likely become a necessity rather than an option.
Occidental and ADNOC’s pairing will view the potential projects through the lense of carbon capture and storage (CCS) in combination with DAC. This will involve not only capturing CO2 at the source of its emissions but also its filtering from the air with dedicated plants that are able to generate carbon removal credits from its activity.
“We look forward to building on our longstanding partnership with ADNOC as we advance our plans to globally deploy DAC technology and engage partners who are committed to developing carbon solutions at climate-relevant scale,” said Vicki Hollub, Occidental President and CEO. “Partnerships like this one are essential to helping the world reach its climate goals and ensure it has the resources it needs to thrive through the energy transition. We look forward to working with ADNOC on our shared vision of establishing a global net-zero ecosystem.”
The Memorandum of Understanding between the companies states that ADNOC has the option of reviewing the opportunities for joining the development of DAC plants – being developed by Oxy subsidiary 1PointFive – as well as carbon sequestration hubs in the United States.
Occidental will have a similar opportunity in the UAE with a 1 million tonne-per-year DAC plant mentioned. This would be the largest plant using this technology and could become a game-changer for the industry, providing a path for decarbonizing heavy industry and sectors like steel and glass production.
2023 has seen ADNOC announce several partnerships for carbon capture and decarbonization. An MOU with Eni was signed in March and recently an agreement to explore fuel decarbonization and carbon utilization was penned with LanzaTech.
Musabbeh Al Kaabi, Executive Director of Low Carbon Solutions and International Growth at ADNOC said: “ADNOC’s is a pioneer in carbon management, exemplified by our industry leading low-carbon intensity and our operation of Al Reyadah, the region’s first commercial scale carbon capture facility. As ADNOC accelerates its net zero ambition to 2045 and decarbonizes our operations, partnerships like this offer the potential to transform the systems that will be vital to provide the lower-carbon energy the world needs for the energy transition.”
ADNOC also plans on creating carbon credits from its own projects aimed at reducing carbon emissions, as well as from projects designed to reduce emissions in other sectors in the UAE.
One of the foundations for the agreement is the UAE-U.S. Partnership for Accelerating Clean Energy (PACE), which started in November last year and could mobilize $100 billion in clean energy and carbon management projects by 2035.
Amos Hochstein, White House Senior Advisor to the President for Energy and Investment said: “The world is going to need a host of technologies, including DAC and CCUS, to meet our global climate objectives. This important announcement is a great example of what the U.S.- UAE Partnership for Accelerating Clean Energy (PACE) can help enable. I look forward to what this agreement yields.”
Several companies are already constructing large-scale direct air capture plants as proof of concepts with 1PointFive building the largest announced DAC plant, named STRATOS. Using technology from DAC pioneers Carbon Engineering, the plant will capture up to 500,000 tonnes of carbon dioxide from the atmosphere when it reaches its full capacity.