Occidental to acquire Carbon Engineering to scale DAC
Houston-based Occidental said August 15 it had entered into a definitive agreement to acquire Canadian direct air capture (DAC) technology developer Carbon Engineering (CE) for a total cash consideration of about $1.1bn.
The payments will be made in three annual disbursements, with the first due at closing. The transaction is expected to close before the end of this year, subject to Canadian court reviews, Canadian and US regulatory approvals and other customary closing conditions.
Occidental has been working with Carbon Engineering to develop its DAC technology since 2019, and the acquisition provides Occidental, through its 1PointFive subsidiary, the opportunity to rapidly advance CE’s DAC technology and accelerate its global deployment as a large-scale, cost-effective carbon removal system.
Ultimately, 1PointFive and CE hope to develop as many as 70 DAC facilities around the world, each capturing up to 1mn tonnes/year of CO2.
“We expect the acquisition of Carbon Engineering to deliver our shareholders value through an improved drive for technology innovation and accelerated DAC cost reductions,” Occidental CEO Vicki Hollub said. “Importantly, the acquisition enables Occidental to catalyse broader development partnerships for DAC deployment in the most capital efficient and valuable way.”
Upon closing, CE will become a wholly-owned subsidiary of Occidental’s Oxy Low Carbon Ventures business, with its employees working closely with Occidental and 1PointFive to bring DAC solutions to market. CE’s research and development activities and innovation centre will remain in Squamish, BC.
1PointFive is currently building Stratos, a 500,000 tonnes/year DAC facility, in Ector County, Texas, which is expected to be operational in mid-2025.
Occidental and CE are also adapting Stratos’ front-end engineering and design study for a DAC plant to be built at King Ranch as part of the South Texas DAC Hub recently selected to receive a grant from the US Department of Energy’s Office of Clean Energy Demonstrations.