TotalEnergies Is Buying and Splitting Up Talos Energy’s CO2 Storage Business

After becoming one of the first US independents to go big on CCS less than 3 years ago, Houston-based Talos Energy is making its exit.

Freeport LNG’s facility
Source: Bayou Bend CCS LLC

Talos Energy has reached an agreement to sell its carbon capture and storage (CCS) subsidiary to TotalEnergies in a deal valued at $148 million, including cash.

The Houston-based independent said the divestment will help repay corporate debt and fund its upstream business which is expected to produce up to 95,000 BOED this year.

Timothy Duncan, CEO of Talos, said of the divestiture, “Strong market interest during our capital raise provided the strategic option to fully monetize the business to TotalEnergies, an established global leader in CCS development.” He further emphasized that the company is continuing to pursue other merger and acquisition opportunities.

The projects included in the transaction form one of the largest CCS portfolios in the US, with an estimated total potential storage capacity of 1.7 billion tons across an area of more than 260,000 acres. These early-stage projects, all located along the US Gulf Coast, include Bayou Bend near Beaumont and Port Arthur, Texas; Coastal Bend CCS near Corpus Christi, Texas; and Harvest Bend CCS, situated between Baton Rouge and New Orleans, Louisiana.

The sale marks a notable pivot for Talos, which has celebrated its first-mover status in the CCS sector since establishing a low-carbon unit in 2021. The company initially aimed to expand its CCS operations to create a stable revenue generator and at one point had expressed interest in international opportunities.

A statement from the company mentioned that Robin Fielder, the executive vice president of Talos’ low-carbon unit and its chief sustainability officer since late 2021, will remain in her position during a transitional phase before departing to explore new opportunities.

With the deal's closure announced simultaneously, TotalEnergies now controls a 25% interest in Bayou Bend, along with Chevron, a 50% stakeholder and project operator, and Equinor, holding the remaining 25%. Chevron and Equinor's involvement began in 2022 and 2023, respectively.

Bayou Bend, with a projected peak capacity of 30 mtpa, is expected to start CO2 injections by late 2025. The project spans nearly 100,000 acres across Chambers and Jefferson counties, Texas, extending to about 40,000 acres offshore near Beaumont and Port Arthur.

TotalEnergies expressed its commitment to the Bayou Bend project, underlining its strategic location near its Port Arthur refinery and La Porte petrochemicals facilities, which will reduce the supermajor’s emissions in the US.

In addition to Bayou Bend, TotalEnergies will acquire a 65% operating stake in Harvest Bend CCS and 50% in Coastal Bend CCS. However, the company plans to offload these interests post-acquisition, citing geographic misalignment with its assets in Texas.