The California Resources Corporation and its carbon management business, Carbon TerraVault (CTV), approved the state’s first carbon capture and storage (CCS) project this week.
The project is located at CRC’s Elk Hills cryogenic gas plant in Kern County.
The Cryogenic Gas Plant CCS project highlights include:
- Capture and Sequestration: CRC plans to capture and, through its joint venture with Brookfield (CTV JV), permanently store up to 100 thousand metric tons (KMTPA) of CO2 per annum from its Elk Hills cryogenic gas plant in the 26R reservoir.
- First Injection: Operations are expected to commence in late 2025.
- Capture Incentives and Revenue Equivalents: CRC is expected to qualify for $85 per metric ton in 45Q tax credits, with potential for Low Carbon Fuel Standard (LCFS) credit generation and reduction in Cap-and-Trade (C&T) liabilities pending California Air Resources Board (CARB) rulemaking. Decarbonized gas throughput is projected to increase propane recovery by up to 100 barrels of natural gas liquids per day.
- Operating Costs: The project’s proximity to CRC’s 26R reservoir will minimize transportation costs associated with sequestration.
- Operating Profitability: Through this project, CTV JV is projected to generate EBITDA1 of $50 – $60 per metric tons in sequestration fees paid by CRC, consistent with the economic type curve2 for CTV storage-only projects.
- Capture Capital Investment: CRC’s capture project capital spending is estimated at $14 – $18 million.
- Reduced GHG Emissions: Project expected to lower Scope 1 and 2 emissions from the Elk Hills Power Plant by up to 7%.
“We are pleased to advance California’s first CCS project to the next stage of its development highlighting our ability to deliver carbon management solutions while reducing our own emissions,” Francisco Leon, CRC’s president and CEO, said. “This project strengthens Carbon TerraVault’s economic opportunities and positions us to create lasting value for our shareholders and partners.”…