Talos announced that it has formed an exclusive joint venture with Storegga Geotechnologies to source, evaluate and develop carbon capture and storage (CCS) project opportunities on the US Gulf Coast and Gulf of Mexico (“GOM”), including state and federal waters offshore Texas, Louisiana, Mississippi and Alabama. The companies are actively exploring opportunities with counterparties along the CCS value chain.
Under the joint venture framework, the companies will originate and mature CCS ventures with emitters, infrastructure providers, service companies and financing partners, among others. The joint venture combines the strengths of Talos’s offshore operational and sub-surface expertise with Storegga’s leading end-to-end CCS project experience. Under the terms of the agreement, as individual CCS projects are matured in the future, each will be ring-fenced with separate operating agreements, financing structures and the possibility of additional working interest partners. The agreement requires zero up front capital commitments, and the partnership will share costs 50/50 in the initial phases. Talos is designated as the operating partner of the joint venture.
Storegga is a European leader in CCS as a lead developer of the Acorn CCS and Acorn Hydrogen Projects and also is actively developing a cutting edge direct carbon air capture (“DAC”) project. The Acorn project is the most advanced large-scale CCS project in the UK, with final investment decision expected in 2022. As one of the leading independent operators in the Gulf Coast and GOM, Talos’s core skill set naturally complements CCS project requirements, particularly with respect to CO2 injection and storage, including geology and geophysics, reservoir engineering, drilling and completion operational excellence, regulatory processes and inland water and offshore logistics.
The US Gulf Coast is a prime location for offshore carbon capture projects in the U.S. The area contains some of the nation’s highest concentrations of power generation, industrial and petrochemical facilities, including 100+ facilities emitting more than 1,000,000 tons of CO2 emissions per year. In addition to the large industrial multi-national companies and conglomerates present in the region, there is also a high density of smaller private and “middle-market” industrial sites which may require CCS solutions in the future.
“We’re excited to announce this joint venture with Storegga and thrilled to partner with their team as they expand into the United States,” said Talos President and CEO Timothy Duncan. “Engaging in CCS projects along the Gulf Coast and shallow water Gulf of Mexico compliments our operating skill set and diversifies the Company to seize this significant market opportunity. We have a responsibility to deliver affordable, reliable energy with the lowest carbon footprint possible, and this joint venture allows us to expand our impact beyond our own assets to provide solutions for removing emissions from critical industrial sectors in our backyard. We are actively working on a host of ideas and are proud to be an exclusive operating partner with a recognized leader in the rapidly-evolving CCS space.”
“The rapid deployment of CCS and carbon management value chains requires appropriate geological storage for carbon sequestration, access to emitters and existing infrastructure, and partnerships with experienced, like-minded organizations that share the desire to make this happen. The US Gulf Coast offers significant potential for CCS and we are delighted to be partnering with Talos, a leading offshore operator. The joint venture demonstrates the international opportunities for Storegga as an independent developer of CCS infrastructure. We hope that it will be the first of many,” said Storegga CEO Nick Cooper.