The Permian Basin’s largest independent oil producer, Diamondback Energy, has signed a nonbinding letter of intent (LOI) to develop a long-term power purchase agreement (PPA) with fast fission power technology company Oklo Inc.
The agreement aims to install Oklo’s Aurora powerhouses to provide emissions-free electricity to Diamondback operations in the Permian Basin for 20 years with an option to extend.
Based in Santa Clara, California, Oklo would license, build, and operate “powerhouses” capable of generating 50 MW of electric power to Diamondback E&P LLC, a wholly owned subsidiary of Midland, Texas-based Diamondback, according to the LOI signed on 8 April.
The agreement outlines options to renew and extend the potential PPA for an additional 20-year term given that Oklo’s designs are intended to operate for 40 years. In addition, Oklo’s design-build-own-operate business model enables potential customers to purchase power without complex ownership issues or other capital requirements, the company said.
Fast reactors use liquid sodium, lead, or other coolants instead of water to remove heat produced by fission, thus creating steam to power turbines that generate electricity. Fast reactors also reuse nuclear fuel, producing more fuel than they consume.
On 12 March, Oklo and Argonne National Laboratory announced successful completion of the second phase of their testing campaign at the Thermal Hydraulic Experimental Test Article (THETA) which is a sodium fixture with world-class instrumentation installed at Argonne’s Mechanisms Engineer Test Loop facility.
The testing campaign focused on key thermal-hydraulic behaviors of Oklo’s fast fission reactor design to facilitate optimization of the reactor and the technology’s penetration of the market, the company said in a news release.
Oklo shared costs for the work done at Argonne with funding from a US Department of Energy Gateway for Accelerated Innovation in Nuclear voucher.
"Argonne’s leadership and technical expertise have been pivotal to THETA’s success, and the completion of the second phase of testing is a huge accomplishment,” Patrick Everett, deputy senior director of product at Oklo, said at the time.
“THETA has and will continue to play a major role in Oklo’s testing endeavors to support our commercialization plans for our Aurora powerhouses," he added.
In February, Diamondback Energy acquired Endeavor Energy Resources in a cash-and-stock deal valued at approximately $26 billion, making Diamondback the largest independent oil producer in the Permian Basin.
“By developing and providing a low-cost, high-reliability, and emission-free energy source, Oklo is poised to help meet the growing energy requirements of operators like Diamondback,” Oklo CEO Jacob DeWitte said in the company’s news release.
“The collaboration between Oklo and Diamondback represents a significant step towards emissions reductions and supporting national energy security by providing reliable access to electricity to power domestic energy operations,” he added.
In July 2023, Oklo entered into a merger agreement with AltC Acquisition Corp., a special purpose acquisition company, aiming to go public upon the closing of the transaction, expected to be in late 2023 or early 2024.
