Occidental Petroleum Corp. has reportedly laid out plans to further its clean energy transition efforts, by investing USD 800 million and USD 1 billion on a plant that will eliminate carbon dioxide from the air.

The proposed facility, which will become the largest direct air capture (DAC) project globally, is expected to start construction by the later part of this year in the Permian basin, the largest oilfield in the U.S., and operations are likely to begin by 2024.

The U.S. oil and gas producer seeks to generate profits by providing technologies that draw out CO2 from the air and bury it underground, for advancing government and business efforts towards environment protection.

Notably, Occidental is already attracting clients, with major airplane-maker Airbus disclosing last month that it would enter a long-term contract to purchase carbon credits from the facility to offset its emissions.

Occidental CEO, Vicki Hollub was quoted saying in a presentation to investors that, this project has the potential to become another value-adding business. She stated that it could prove to be more valuable to stakeholders than its chemical operations arm, which netted over USD 1.5 billion in 2021.

According to sources, the company’s investments in the low carbon business will be USD 275 million this year. Moreover, it has plans to develop three-carbon sequestration hubs that will go live by 2025 and to build 69 additional DAC facilities by 2035.

Occidental shares surged by 1%, trading at USD 60.03 in midday trading. The company’s shares have doubled in value in 2022, triggered by its revived share buyback scheme, continuing debt reductions, and surging oil prices.

This first DAC facility built by Occidental aims to remove 1 million tons of carbon dioxide from the atmosphere annually, which is 100 times greater than all the 19 DAC plants’ capacity currently operating worldwide combined.

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https://money.usnews.com/investing/news/articles/2022-03-23/occidental-plans-up-to-1-billion-for-facility-to-capture-carbon-from-air