US oil and gas company Occidental has signed a definitive agreement to buy carbon capture technology company Carbon Engineering in a cash deal valued at approximately $1.1bn.
Since 2019, Occidental and Carbon Engineering have been collaborating on the deployment of direct air capture (DAC).
The deal gives Occidental, through its subsidiary 1PointFive, the chance to advance the DAC technology and hasten the deployment of DAC as a large-scale, affordable, global solution for carbon removal.
According to Occidental, the DAC-based climate solutions offered by Carbon Engineering use tested industrial machinery and standardised procedures.
1PointFive is setting up DAC plant Stratos, which is expected to come online in mid-2025, in Ector County, Texas.
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Carbon Engineering will become part of Oxy Low Carbon Ventures upon the deal completion, which is expected before the end of 2023.
Working closely with the teams at Occidental and 1PointFive, Carbon Engineering’s staff will continue to develop the DAC technology to bring it to market.
The Innovation Centre and research and development operations of Carbon Engineering will continue to be located in Squamish, British Columbia.
Occidental president and CEO Vicki Hollub said: “We expect the acquisition of Carbon Engineering to deliver our shareholders value through an improved drive for technology innovation and accelerated DAC cost reductions.
“The technology partnership also adds new revenue streams in the form of technology licensing and royalties. Importantly, the acquisition enables Occidental to catalyse broader development partnerships for DAC deployment in the most capital efficient and valuable way.”
Carbon Engineering CEO Daniel Friedmann said: “Carbon Engineering and Occidental have been working increasingly close together for the past five years to address the CO₂ [carbon dioxide] problem, making Occidental a trusted and committed partner for this next chapter in Carbon Engineering’s journey.”
Earlier this month, Occidental formed a CO₂ capture and storage partnership with Abu Dhabi National Oil Company.
