Occidental (NYSE: OXY) and ADNOC’s investment company, XRG, are teaming up to evaluate a $500 million joint venture for a Direct Air Capture (DAC) facility in South Texas. The project aims to capture 500,000 tonnes of CO2 per year, advancing DAC as a scalable solution for emissions reduction.
This agreement expands on Occidental’s existing carbon capture efforts, including the STRATOS DAC facility in West Texas, which is nearing completion. The announcement was made during U.S. President Donald Trump’s state visit to the UAE, underscoring its geopolitical and economic significance.
📍 South Texas DAC Hub Highlights:
- Location: King Ranch, Kleberg County, Texas
- First phase: 500,000 tCO2/year capture capacity
- Storage potential: Up to 3 billion tonnes of CO2 in subsurface formations
- $650M support from U.S. Department of Energy (DOE)
- Strategic proximity to Gulf Coast energy infrastructure
🔎 STRATOS DAC vs South Texas DAC Hub: Side-by-Side
| Feature | STRATOS DAC (West Texas) | South Texas DAC Hub (King Ranch) |
|---|---|---|
| Location | Ector County, West Texas | Kleberg County, South Texas (King Ranch) |
| Partners | Occidental, 1PointFive, Carbon Engineering | Occidental, 1PointFive, ADNOC (XRG) |
| Capacity (Phase 1) | 500,000 tonnes CO2 per year | 500,000 tonnes CO2 per year (initial facility) |
| Long-Term Scale Potential | Targeting millions of tonnes per year with future phases | Up to 3 billion tonnes CO2 storage capacity (subsurface) |
| Project Status | Under construction, first-of-its-kind DAC facility | Front-end engineering & design (FEED) phase |
| Start of Operations | Expected 2025 | Timeline TBD (early-stage agreement) |
| Government Support | Significant backing, DAC flagship project | Awarded up to $650 million from U.S. Department of Energy |
| Strategic Value | Proof of DAC scalability & global replication | U.S.-UAE partnership & Gulf Coast CO2 infrastructure |
| End Use of Captured CO2 | Sequestration & potential utilization (EOR, products) | Sequestration & industrial offtake along Gulf Coast |
🛢 Why It Matters:
✅ Scalable carbon removal at industrial scale
✅ Strengthens U.S. Gulf Coast carbon infrastructure
✅ Reinforces U.S.-UAE energy cooperation
✅ Aligns with global 1.5°C climate goals
✅ Brings private + public capital into DAC deployment
Vicki Hollub, CEO of Occidental:
“Agreements like this, along with U.S. DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas.”
This collaboration is a clear signal that DAC is moving from concept to large-scale reality — with Texas as ground zero.
