Direct air capture company Spiritus has signed the first three letters of intent with oil and gas producers in the United States, agreeing to provide its technology for on-site supply of CO2 for enhanced oil recovery (EOR).
The three agreements, signed with producers across the Rockies, Midwest, and U.S. Gulf Coast, represent a total of over 3 million tonnes of annual CO2 demand for EOR.
With this CO2 supply, the oil and gas companies will recover oil from fields that have already been drilled and developed. Based on industry-standard CO2 utilization rates and project lives, the three projects could recover more than 70 million incremental barrels of oil.
“One of the biggest constraints on CO2 EOR deployment has been getting enough affordable CO2 to the fields that need it,” said Charles Cadieu, co-founder and CEO of Spiritus.
The technology company is now solving this limitation by providing oil and gas producers with on-site systems that capture CO2 from the air at costs competitive with traditional supply and at an industrial scale.
Enhanced oil recovery extracts hard-to-reach oil
Currently, the United States is the world’s largest oil producer. The country’s oil and gas operators have been using EOR for more than 50 years to recover additional oil from mature fields by injecting compressed CO2 into a reservoir, where it mobilizes the oil left behind after earlier production.
According to federal studies, CO2 enhanced oil recovery could unlock an estimated 137 billion barrels of technically recoverable U.S. oil.
Cadieu stated, “Much of the next increment of U.S. oil production can come from fields that already have wells, pipelines and infrastructure around them. In many of those fields, the missing piece is affordable CO2. Spiritus is building a new source of supply around that constraint.”
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The three signed letters of intent entail CO2 delivery site development and mark the first step toward long-term CO2 offtake agreements.
In the meantime, Spiritus is actively in discussions with other oil and gas operators from major U.S. producing regions, and the company invites companies interested in such collaborations to reach out to its team.
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