Equinor buys Carbonvert's stake in Bayou Bend carbon capture and sequestration project

With nearly 140,000 gross acres of pore space for permanent CO2 sequestration and gross potential storage resources of more than 1 billion metric tons, Bayou Bend could be one of the largest CCS sites in the U.S. for industrial emitters, Equinor said. The site includes nearly 100,000 gross acres onshore in Chambers and Jefferson counties plus approximately 40,000 gross acres offshore Beaumont and Port Arthur.

COURTESY EQUINOR

By Olivia Pulsinelli – Assistant managing editor, Houston Business Journal
Aug 28, 2023

Denver-based Carbonvert Inc. has sold its stake in the Bayou Bend carbon capture and sequestration project along the Texas Gulf Coast to Norway-based Equinor ASA (NYSE: EQNR).

Bayou Bend CCS LLC is a joint venture with subsidiaries of Houston-based Talos Energy Inc. (NYSE: TALO) and California-based Chevron Corp. (NYSE: CVX). Chevron owns a 50% stake in the JV, and Talos owns 25%. Chevron is the operator.

Equinor acquired all of Carbonvert's 25% stake, the companies said Aug. 28. Financial terms were not disclosed.

The initial JV between Talos and Carbonvert was selected as the winning bidder for the Texas General Land Office's Jefferson County carbon storage lease offshore Beaumont and Port Arthur in 2021. It was the first offshore lease in the U.S. dedicated to carbon dioxide sequestration, according to the companies and the GLO. Chevron joined the JV in May 2022.

"Commercial CCS solutions are critical for hard-to-abate industries to meet their climate ambitions while maintaining their activity," Grete Tveit, Equinor's senior vice president for low-carbon solutions, said in an Aug. 28 press release. "Entering Bayou Bend strengthens our low-carbon solutions portfolio and supports our ambition to mature and develop 15 million-30 million tonnes of equity (carbon dioxide) transport and storage capacity per year by 2035. Our experience from developing carbon storage projects can help advance decarbonization efforts in one of the largest industrial corridors in the U.S."

With nearly 140,000 gross acres of pore space for permanent CO2 sequestration and gross potential storage resources of more than 1 billion metric tons, Bayou Bend could be one of the largest CCS sites in the U.S. for industrial emitters, Equinor said. The site includes nearly 100,000 gross acres onshore in Chambers and Jefferson counties plus approximately 40,000 gross acres offshore Beaumont and Port Arthur.

During Talos’ second-quarter earnings call, CEO Timothy “Tim” Duncan said the company plans to drill its first offshore stratigraphic well for Bayou Bend in the second half of the year. Chevron will operate a stratigraphic well onshore by the first half of 2024.

"We continue to make significant progress in developing Bayou Bend, which we believe will be a premier regional carbon storage hub solution for Texas’ largest industrial region," Robin Fielder, Talos' executive vice president of low carbon strategy and chief sustainability officer, said in the Aug. 28 release. "Equinor is a welcomed addition to the partnership. Their experience and track record further enhance the joint venture, which is committed to developing safe, reliable, cost-effective lower-carbon solutions while enabling continued economic growth."

This is the first low-carbon project Equinor has announced on the Gulf Coast and thus a significant milestone for the company, said Chris Golden, senior vice president and U.S. country manager. Earlier this year, Upstream News reported that Equinor left a decarbonization project in Appalachia in favor of a potential carbon capture project on the U.S. Gulf Coast after the Inflation Reduction Act was signed.

"Alongside our upstream production and offshore wind developments, we’re strengthening our position as a broad energy company and expanding our footprint in the Gulf region," Golden said in the Aug. 28 announcement.

Equinor manages key strategic and innovative initiatives and its offshore exploration and production activities from its Houston office, according to the company's website.