Occidental set to start building world's largest carbon removal plant

Occidental Petroleum (US.OXY) and Canadian startup Carbon Engineering Ltd. are preparing a site in the Permian Basin for a plant that will draw down 500K tons/year of carbon dioxide, Oxy CEO Vicki Hollub told Bloomberg Monday. The groundbreaking ceremony for the direct air capture plant - planned to be 120x larger than the world's largest facility using similar technology - will occur on November 29 with commercial operations expected to start at the end of 2024.

Occidental also is counting on the sale of "net-zero oil" that it plans to produce by injecting more CO2 into oil reservoirs than is emitted by the process of extracting and burning the oil; the enhanced oil recovery process pushes out more oil from reservoirs than other techniques.

"If our plans work, we'd like our revenue from carbon capture to be equal to oil and gas revenues," Hollub said, believing "using CO2 for enhanced oil recovery and generating net-zero barrels is the way."

Occidental Petroleum (OXY) said last week it was teaming with Natural Resource Partners to evaluate and potentially develop a permanent carbon dioxide sequestration hub in southeast Texas.