US supermajor Chevron will become a partner in the joint venture developing the Bayou Bend CCS carbon capture and sequestration hub, a 40,000-acre project offshore south-east Texas that its backers claim could potentially sequester 225 million to 275 million tonnes of carbon dioxide from the heavily industrialised area.
Chevron’s New Energies division has agreed to join Talos Low Carbon Solutions, a business segment of Houston-based exploration and production company Talos Energy, and CCS project development and financing company Carbonvert in the Gulf of Mexico project, which aims to be the first large-scale offshore CCS site in the US.
This marks Chevron’s first CCS project in an entirely offshore environment.
It’s two other CCS projects are Gorgon CCS in Western Australia's Barrow Island, and the Shell-operated Quest CCS project in the Alberta oil sands.
The Talos and Carbonvert joint venture, now known as Bayou Bend CCS, was the winning bidder last year in the Texas General Land Office’s Jefferson County carbon storage lease, south of the cities of Beaumont and Port Arthur.
Under a memorandum of understanding announced on 3 May, Talos and Carbonvert “would contribute the Bayou Bend CCS lease to an expanded joint venture including Chevron in exchange for consideration of cash at closing and capital cost carry through the project’s final investment decision”, Talos and Chevron said, without disclosing financial details.
Upon closing of the joint venture, equity interests will be 25% Talos, 25% Carbonvert and 50% Chevron with Talos remaining operator.
Talos chief executive Timothy Duncan said: "We share a collective interest and commitment to developing low carbon solutions, and the success of these solutions will depend greatly on collaborative partnerships throughout the value chain.
“We believe the addition of Chevron greatly enhances the execution of this hub-scale project and we hope this sends a clear signal to industrial partners in the Beaumont and Port Arthur region that we are focused on making Bayou Bend the premier CCS project in southeast Texas."
Chevron New Energies vice president of CCS, Chris Powers, said: "This venture is an example of the potential that partnering can have in moving large-scale lower carbon projects forward."
Along the Gulf Coast
The Bayou Bend project was the first of four CCS projects Talos has announced along the Gulf Coast, with first injection expected by late 2025.
Talos earlier this year unveiled plans to develop the River Bend CCS project in the Mississippi River industrial corridor in Louisiana - with first injection expected in 2026 - and also the Coastal Blend CCS project with the Port of Corpus Christi, where startup is expected in late 2026.
In November 2021, Talos said it would partner with Freeport LNG on a CCS project adjacent to Freeport’s gas pretreatment facilities on the Gulf of Mexico coast south-west of Houston. This project could see first injection as early as 2024.
Most of these projects have lease agreements in place, creating a foothold for Talos’ CCS ambitions along the US Gulf Coast.
Duncan claimed the quick rollout strategy is.a vote of confidence in the growing commitment of companies and investors to respond to environmental, social, and governance demands rather than waiting for regulators to do it for them.
"Just going to your board and saying, 'Hey I've got a great idea, and it only relies on politicians getting their crap together,' is not a good board meeting to have," a bullish Duncan told his audience at an Offshore Technology Conference (OTC) panel.
He explained why Talos is investing in carbon sequestration, transport and storage before finalising emitting partners.
"As you guys can imagine, driving on I-10 from New Orleans to Houston, there's a market. There's industrial emissions everywhere," Duncan affirmed.
"If we sit there and say, 'you know what, this is interesting, I've got a lot of seismic, let's wait and see what happens,' guess what happens. Everyone else grabs all the good available stores to work with the emitters on."