Exxon this week sealed its fourth carbon capture and storage deal, this time with ammonia producer CF Industries.
Under the deal, Exxon will capture and store half a million tons of carbon dioxide from a CF Industries facility in Mississippi, starting in 2028. The deal will enable CF Industries to reduce emissions from the site by 50%, the supermajor said.
The deal, which is the fourth CCS contract for Exxon and the second such deal with CF Industries, will bring the total amount of carbon dioxide it would be capturing and storing to 5.5 million tons annually.
"That's equivalent to replacing about 2 million gasoline-powered cars with electric vehicles, which is more than the total EVs sold in the United States in 2023," Exxon said.
The company placed its biggest bet on carbon capture last year when it acquired Denbury Resources for close to $5 billion. The target company owned and operated a pipeline network for transporting carbon dioxide.
Besides that acquisition, Exxon has also signed three more deals for carbon capture and storage, one with CF Industries, one with industrial gas makers Linde, and one with steelmaker Nucor. Earlier this year Exxon also said it had teamed up with Shell to develop carbon capture and storage solutions for Singapore.
Carbon capture and storage is the obvious choice for many oil producers who want to reduce their carbon footprint-or help others reduce theirs. Investment, however, needs to expand considerably under net-zero scenarios.
Earlier this year, Wood Mackenzie projected that CCS investment would reach close to $200 billion by 2034, bringing into existence a capture capacity of 440 million tons annually and a storage capacity of 664 million tons annually. Half of that investment would go towards expanding capture, with the other half split between the transportation of CO2 and storage.
By Charles Kennedy for Oilprice.com
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