Benzinga | Mar 25, 2021 04:46PM EDT

NextDecade And Oxy Low Carbon Ventures Sign Term Sheet For CO2 Transportation And Storage In South Texas; Financial Details Not Disclosed

NextDecade Corporation (NextDecade) (NASDAQ:NEXT), a clean energy company accelerating the path to a net-zero future, and Oxy Low Carbon Ventures (OLCV), a subsidiary of Occidental (NYSE:OXY) and global leader in carbon dioxide (CO2) management, today announced that they have executed a term sheet for the offtake and permanent geologic storage of CO2 captured from NextDecade's planned Rio Grande LNG project in the Port of Brownsville, Texas.

Earlier this month, NextDecade announced the formation of NEXT Carbon Solutions, a wholly owned subsidiary that is expected to -- among other things -- develop one of the largest carbon capture and storage (CCS) projects in North America at Rio Grande LNG. NEXT Carbon Solutions' CCS project at Rio Grande LNG is expected to enable the capture and permanent geologic storage of more than five million tonnes of CO2 per year.

Under the terms of the agreement, OLCV will offtake and transport CO2 from the Rio Grande LNG project and permanently sequester it in an underground geologic formation in the Rio Grande Valley, where there is vast CO2 storage capacity, pursuant to a CO2 Offtake Agreement and a Sequestration and Monitoring Agreement to be negotiated by the parties.

"We are pleased to be working with OLCV to design, construct, and operate a CO2 pipeline and permanent storage facility in South Texas," said Matt Schatzman, NextDecade's Chairman and Chief Executive Officer. "OLCV's expertise and reliability complement the transformative and impactful contributions our NEXT Carbon Solutions business is making to the global energy industry, and in particular the proprietary processes we are advancing to lower the cost of utilizing CCS technology."

"We are excited to partner with NextDecade to enable the supply of low-carbon natural gas to international markets. Signing this agreement is an important milestone in scaling up OLCV's pure sequestration business and providing services to help others achieve their net zero goals," said Richard Jackson, Occidental's President, Operations, U.S. Onshore Resources and Carbon Management. "The CO2 sequestration facility proposed for South Texas is a great example of the many sequestration hubs that OLCV plans to develop across the United States, and eventually around the globe."

To realize the significant benefits associated with co-development of Rio Grande LNG and the CCS project, NextDecade anticipates achieving final investment decision (FID) on a minimum of two trains at Rio Grande LNG in 2021 and FID on NEXT Carbon Solutions' CCS project soon after FID at Rio Grande LNG.