Australian engineering company Worley has been awarded a front-end engineering and design contract on a direct air capture project by a joint venture between Occidental Petroleum and Rusheen Capital.

The FEED contract was awarded by 1PointFive, the joint venture between Rusheen and Occidental subsidiary Oxy Low Carbon Ventures, for a direct air capture unit to be built in the US Permian basin.

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Worley claims it will be the first commercial-scale development using Carbon Engineering’s direct air capture technology, which removes carbon dioxide directly from the atmosphere.

“This direct air capture project is a starting point for the deployment of commercial-scale DAC to help companies meet carbon dioxide emission-reduction targets and aligns with Worley’s strategic focus of delivering a more sustainable world,” said Worley chief executive Chris Ashton.

The direct air capture facility, known as DAC 1, is expected to be followed by another three units.

When complete, the facility will have the capacity to extract 1 million tonnes of atmospheric CO2 annually, equivalent to the work of about 40 million trees, according to technology supplier Carbon Engineering.

This would mark a significant increase in direct air capture capacity, with the International Energy Agency noting that the 15 direct air capture plants currently in operation around the globe only having a combined capacity to capture over 9000 tonnes of CO2 per annum.

The FEED phase for DAC 1 will focus on the first train, which will capture 500,000 metric tonnes of CO2 annually, according to 1PointFive.

FEED work on the first unit will be led by Worley’s Houston office, with support from its global integrated delivery team in India.

Worley added that it expects to form an alliance with 1PointFive, following the completion of the FEED work, to move into the engineering, procurement and construction phase for the project.

The FEED work is scheduled to start in the next 90 days, with completion expected by the end of the year.

Occidental has previously indicated it will use the captured CO2 for enhanced oil recovery operations at its assets in the Permian basin.

According to the US company's website, it currently injects about 2.6 billion cubic feet per day of CO2 into the Permian, or more than 950 Bcf per annum, making it the largest CO2 injector in the Permian basin.

News of the award from 1PointFive came as Worley also announced its profits had tumbled 81% in the first half of the Australian financial year, which ends on 30 June, as revenues shrank amid the Covid-19 pandemic.

Worley posts fall in profits

Worley posted an after-tax profit of just A$22 million (US$17.4 million) for the six months to 31 December, compared to a profit of A$115 million over the same period a year earlier.

Underlying net profits after taxes and amortisation were also down 46%, year-on-year, at A$117 million, compared to A$216 million in the first half of the 2020 financial year.

The fall in profits came as revenues shrank 29%, to less than A$4.88 billion, with Ashton admitting the first half of the 2021 financial year had been “a challenging period” for Worley.

“Global economic circumstances, including the Covid-19 pandemic, have impacted our customers, particularly demand in their end markets,” he said.

“As a result, we have seen project deferrals, mainly in the Americas, although minimal cancellations. Throughout the pandemic, the safety and well-being of our people remains our priority and we continue to provide a safe work environment for our office and field-based people.”

Worley also saw its contract backlog decline, totalling A$13.5 billion as of 31 December, compared to A$16.8 billion at 30 June last year.

It attributed about 75% of the decline in backlog to lower activity on long-term contracts and foreign exchange translation, while it was also impacted by the deferral of projects and contract awards.

However, the company noted that deferred projects were likely to return this year as global economic circumstances improve.