Key Impact Points:
- $500M investment under evaluation: XRG may invest up to $500 million in 1PointFive’s Direct Air Capture (DAC) facility to remove 500,000 tonnes of CO₂ annually.
- Strategic U.S.-UAE energy partnership: Deal deepens cooperation between Occidental and ADNOC during Trump’s state visit to the UAE.
- South Texas DAC Hub gains momentum: Supported by a $650 million DOE award, the hub could eventually store up to 3 billion tonnes of CO₂.
Joint Venture Targets Large-Scale Carbon Removal
Occidental and ADNOC’s investment arm, XRG, have signed a Strategic DAC Framework Agreement to explore a joint venture to build a Direct Air Capture (DAC) facility in South Texas. The project would be developed by Occidental subsidiary 1PointFive.
XRG is considering investing up to $500 million in the facility, which is designed to capture 500,000 tonnes of CO₂ annually.
Announced During Trump’s UAE Visit
The agreement was signed by Occidental President and CEO Vicki Hollub and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber during U.S. President Donald Trump’s state visit to the UAE.
“We are proud to advance our decades-long partnership with ADNOC and XRG on our South Texas DAC Hub, which we believe will deliver game-changing technology to support U.S. energy independence and global goals,” said Hollub.
“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.”
Federal Support and Strategic Location
The U.S. Department of Energy recently awarded up to $650 million to support the development of the South Texas DAC Hub. The facility will be located on King Ranch in Kleberg County, Texas, spanning 165 square miles and offering long-term CO₂ storage potential of up to 3 billion tonnes.
The site’s proximity to U.S. Gulf Coast industrial infrastructure allows captured CO₂ to be utilized or stored in geologic formations.
Strengthening U.S.-UAE Energy Ties
The move builds on Occidental and ADNOC’s 2023 memorandum of understanding to collaborate on carbon capture, utilization and storage (CCUS) projects across the U.S. and UAE.
“Our longstanding partnership with Occidental continues to drive scalable, high-growth and strategically attractive projects that create long-term sustainable value,” said Khaled Salmeen, Chief Operating Officer of XRG “The U.S. is a priority market for XRG and we look forward to building on this partnership as we continue to invest in strategic projects across the energy value chain.”
Expanding Global Climate Solutions
This agreement marks the latest in a series of milestones for Occidental’s DAC leadership, including its first facility, STRATOS, which is on track to launch commercial operations in 2025.
XRG’s involvement underscores ADNOC’s intent to invest in scalable lower-carbon energy solutions globally while deepening its strategic footprint in the U.S. energy transition.
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