Carbon capture and storage

Shell Signs On With ExxonMobil-Led Effort To Build World's Largest CCS Project

The announcement means that the megascale carbon capture and storage project now has 14 large industrial players behind it. Still, it remains unclear when the project might get under way.

Source: Shell.

Shell has joined the growing ranks of supporters behind what could be the world’s largest carbon capture and storage (CCS) project that is known as the CCS Innovation Zone. Industrial gas company Air Liquide and chemical maker BASF joined Shell in voicing support for the project, which was first announced in April 2020 by ExxonMobil.

The three firms make for a total of 14 of oil and gas producers, refiners, chemical makers, and power generation companies that are evaluating the project. It proposes to capture emissions from industrial sites around Houston and transport them to injection wells in the Gulf of Mexico.

In addition to ExxonMobil, the list of corporate supporters includes: Chevron, Marathon Petroleum, Phillips 66, Dow, INEOS, Linde, LyondellBasell, NRG Energy, and Calpine.

Shell’s decision to back the ExxonMobil-led initiative comes just a few months after it failed to secure a CCS deal that it said would have generated upwards of $100 million in government income for neighboring Louisiana. Last October, Shell was among a handful of oil producers that protested the awarding of CCS operating agreements to two non-oil and gas firms by Louisiana’s Department of Natural Resources.

The 14 companies backing the Houston-area CCS Innovation Hub say they are in the evaluation stage. In December, they took part in workshops at the University of Houston that were focused on how the consortium will work together in launching the megascale CCS project.

“As the energy capital of the world, Houston has the expertise and leadership—including industry, academia and policymakers—to realize a low-carbon, reliable and affordable energy future. I look forward to working alongside these 14 companies to make Houston the global leader in CCS,” Charles McConnell, director of the University of Houston’s Center for Carbon Management in Energy, said in a press statement on 20 January.

Emissions sources under review include power plants, plastic manufacturing facilities, and refineries that are located along the Houston Ship Channel and elsewhere on the Texas Gulf Coast.

By 2030, these sites may direct up to 50 mtpa of CO2 toward an undefined number of offshore injection wells. By 2040, the consortium estimates that volume could double to 100 mtpa.

This would dwarf the largest single CCS project in the world today, ExxonMobil’s natural gas facility in LaBarge, Wyoming, which has a maximum injection capacity of 7 mtpa. Last year, ExxonMobil announced it was spending nearly $400 million at the LaBarge site to add another 1 mtpa in capacity.

Real Estate Secured?

ExxonMobil has said it has spent the last few years considering the CCS Innovation Zone project. Some of that groundwork likely includes research that the oil company supported and was carried out by The University of Texas at Austin’s Energy Institute.

In a peer-reviewed paper (SPE 196723) first published in 2019, university researchers describe efforts to model various CO2 injection schemes in nearshore geologic formations found in the Gulf of Mexico. The detailed study used outcrop analysis and seismic data of Lower to Middle Miocene deltaic reservoirs with total depths of 1000 m to 2500 m.

In November 2021, ExxonMobil appeared to be taking a step forward on utilizing such reservoirs when it issued almost $15.5 million in high bids on 94 exploration blocks off the Texas coast during a US federal auction.

Notably, the shallow-water areas ExxonMobil bid on are not considered to be attractive for new oil and gas exploration. Additionally, the oil company spent the past decade divesting its shallow-water properties in the US through a series of asset sales. Hence the speculation that the blocks are potentially destined to be CCS sites.

Still No Timetable

ExxonMobil, nor its growing list of collaborators, have tipped their hand as to when the CCS Innovation Hub might break ground. As such, it remains speculative as to whether the 2030 or 2040 injection targets can be reached.

From the onset, ExxonMobil has said that paying for the project's estimated $100-billion price tag will depend on an unspecified amount of federal funding. So far, the project has received words of public support from local and state policy makers, but no commitments of public funding have been announced.