CTV Doubles the Storage Reservations at the
CRC’s Net Zero Industrial Park at Elk Hills Field and Announces the
Submission of Another Class VI permit to the U.S. EPA
California Resources Corporation (NYSE: CRC) today announced a
storage-only Carbon Dioxide Management Agreement (CDMA) between
Carbon TerraVault JV HoldCo, LLC (CTV JV), a subsidiary of CRC that
provides services including the capture, transport and storage of
carbon dioxide (CO2), and Verde Clean Fuels Inc. (Verde), a company
that utilizes an innovative and proprietary liquid fuels technology
to produce renewable and lower-carbon intensity gasoline and other
liquid fuels from feedstocks such as biomass, agricultural waste,
or flared natural gas. CRC also more than doubled the expected
sequestration volume of its previously announced Lone Cypress
Energy Services, LLC, (Lone Cypress) blue hydrogen project.
“The Carbon TerraVault team continued to make substantial
progress through the first half of the year, with four
administratively complete EPA Class VI permit applications and 191
million metric tons (MMT) of CO2 storage capacity submitted to EPA
for Class VI permits to date. The team has executed five CDMAs with
promising greenfield projects that can accelerate the new energy
economy in California and leverage Carbon TerraVault’s
decarbonization solutions,” said Francisco Leon, CRC’s President
and Chief Executive Officer. “The most recent expansion of the Lone
Cypress blue hydrogen facility and our new partnership with Verde
Clean Energy further demonstrates the benefits CRC’s unique asset
position and carbon management strategy can deliver to California’s
energy transition goals.”
Primary Highlights
- Signed storage-only CDMA with Verde for minimum volume
commitment of 100 thousand metric tons per annum (KMTPA) of CO2
injection
- Expanded its previously announced Lone Cypress blue hydrogen
project to 205 KMTPA of associated CO2 that will be permanently
sequestered at CTV I reservoir
- CTV’s total projected CO2 injection rate under CDMAs now stands
at 815 KMTPA with targeted 405 KMTPA in the San Joaquin Basin and
410 KMTPA in the Sacramento basin
- Submitted a 17 MMT Class VI permit to the EPA for CTV V CO2
reservoir in the Sacramento Basin bringing CTV's total projected
storage capacity with Class VI permits submitted the EPA to 191
MMT
Verde Clean Energy, LLC CDMA
In July 2023, CTV JV entered into a CDMA with Verde to sequester
a minimum of 100 KMTPA of CO2 at the CTV I carbon storage vault
from a new renewable gasoline plant to be constructed at CRC’s Net
Zero Industrial Park at Elk Hills in Kern County, California. This
new facility is expected to produce 21,000 gallons per day of
renewable gasoline from biomass and other agricultural waste
feedstock to help support decarbonization of California’s economy
and its transportation sector.
“Doubling the CO2 storage opportunities under CDMAs at our CRC’s
Net Zero Industrial Park at Elk Hills field in a matter of eight
months further underscores CRC’s carbon management strategy and
dedication to energy transition in California,” said Leon. “This
new agreement between CTV JV and Verde Clean Fuels provides an
innovative approach to renewable fuels at the heart of energy
development in the state, and further validates CRC’s
decarbonization efforts by a publicly traded company looking to
expand in California.”
“Traditional gasoline used today is refined from crude oil and
makes up over half of greenhouse gas emissions from the U.S.
transportation sector. We believe our proprietary technology and
our scientific approach will further enable California’s consumers
of gasoline to seamlessly and materially participate in the
decarbonization of our atmosphere and help achieve California’s
climate goals,” said Ernest Miller, Verde Chief Executive Officer.
“Our agreement with CTV solidifies our domestic growth ambitions
and provides a concrete pathway to the decarbonization of the
transportation sector with the leading carbon management business
in the US.”
Highlights of Verde CDMA
include:
- The renewable gasoline facility will employ Verde proprietary
and innovative liquid fuels technology to convert synthetic gas
(syngas) produced by InEnTec’s gasification system, into renewable
gasoline. The project is expected to produce more than 7.5 million
gallons per year of renewable gasoline for use as transportation
fuel. A minimum of 100 KMTPA of associated CO2 is expected to be
permanently sequestered at CTV I
- Project Final Investment Decision (FID) is targeted for 2025,
with operations expected to begin in 2027
- The CDMA also provides Verde with a lease for 50 acres at CRC’s
Net Zero Industrial Park at Elk Hills field on which to construct
its facility
- CTV JV will provide in-field transportation and a permanent CO2
sequestration site at CTV I in exchange for an injection fee on a
per MT basis that fits within the previously disclosed economic
type-curve for projects that require a storage-only solution
- The project’s location at the CRC’s Net Zero Industrial Park
will eliminate the need for long haul CO2 transportation and reduce
certain midstream capital requirements
- CTV JV and Verde are discussing CRC’s potential financial
participation in the RG facility, including potentially a
significant equity stake
- The CDMA frames the contractual terms between parties by
outlining the material economics and terms of the project and
includes conditions precedent to close. The CDMA provides a path
for the parties to reach final definitive documents and FID
About Carbon TerraVault
Carbon TerraVault Holdings, LLC (CTV), a subsidiary of CRC,
provides services that include the capture, transport and storage
of carbon dioxide for its customers. CTV is engaged in a series of
CCS projects that inject CO2 captured from industrial sources into
depleted underground reservoirs and permanently store CO2 deep
underground. For more information about CTV, please visit
www.carbonterravault.com.
About Carbon TerraVault Joint
Venture
Carbon TerraVault Joint Venture is a carbon management
partnership focused on carbon capture and sequestration
development, and was formed between Carbon TerraVault, a subsidiary
of CRC, and Brookfield Renewable. The CTV JV develops both
infrastructure and storage assets required for CCS development in
California. CRC owns 51% of the CTV JV with Brookfield Renewable
owning the remaining 49% interest.
About California Resources
Corporation
California Resources Corporation (CRC) is an independent energy
and carbon management company committed to energy transition. CRC
has some of the lowest carbon intensity production in the US and it
is focused on maximizing the value of its land, mineral and
technical resources for decarbonization by developing CCS and other
emissions reducing projects. For more information about CRC, please
visit www.crc.com.
About Lone Cypress Energy
Services
Lone Cypress Energy Services, LLC is an independent energy
company focused on the development and operation of infrastructure
across the entire energy value chain. Headquartered in Tulsa, OK,
Lone Cypress offers a full suite of technology-enabled solutions
including project development, project management, EPC contracting,
and asset operations. Lone Cypress specializes in the development
of hydrogen generation and distribution projects, waste to energy
plant solutions, and traditional oil and gas midstream facilities.
For more information, please visit
www.lonecypressenergyservices.com.
About Verde Clean Fuels,
Inc
Verde Clean Fuels, Inc. (Verde) is a renewable energy company
focused on the development of commercial production plants to
convert syngas, derived from diverse biomass feedstocks, such as
yard waste, agricultural waste, and sorted municipal solid waste,
as well as stranded or flared natural gas (including renewable
natural gas) into gasoline through its innovative and proprietary
liquid fuels technology, the STG+® process. Through its STG+®
process, Verde converts syngas into fully finished fuels that
require no additional refining, such as Reformulated Blend-stock
for Oxygenate Blending (“RBOB”) gasoline. To learn more about
Verde, please visit www.verdecleanfuels.com.
Forward-Looking
Statements
This document contains statements that CRC believes to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than historical facts
are forward-looking statements, and include statements regarding
CRC's future financial position, business strategy, projected
revenues, earnings, costs, capital expenditures and plans and
objectives of management for the future.
Words such as "expect," “could,” “may,” "anticipate," "intend,"
"plan," “ability,” "believe," "seek," "see," "will," "would,"
“estimate,” “forecast,” "target," “guidance,” “outlook,”
“opportunity” or “strategy” or similar expressions are generally
intended to identify forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed in, or implied by, such statements.
Although CRC believes the expectations and forecasts reflected
in CRC's forward-looking statements are reasonable, they are
inherently subject to numerous risks and uncertainties, most of
which are difficult to predict and many of which are beyond CRC's
control. No assurance can be given that such forward-looking
statements will be correct or achieved or that the assumptions are
accurate or will not change over time. Particular uncertainties
that could cause CRC's actual results to be materially different
than those expressed in CRC's forward-looking statements
include:
- CRC’s ability to finalize definitive documents and reach a
final investment decision with respect to Verde’s project
contemplated by its CDMA;
- the ability of Verde’s project to achieve expected production
volumes and associated CO2 generation and the ability of the CTV to
sequester such CO2 volumes, respectively;
- CRC's ability to successfully execute on the construction of
Verde’s project and other aspects of infrastructure projects and
enter into third party contracts on contemplated terms;
- fluctuations in commodity prices and the potential for
sustained low commodity prices;
- equipment, service or labor price inflation or
unavailability;
- legislative or regulatory changes, including those related to
(i) the management of energy, water, land, greenhouse gases (GHGs)
or other emissions, (ii) the protection of health, safety and the
environment, (iii) CRC's ability to claim and utilize tax credits
or other incentives, or (v) the transportation, marketing and sale
of CRC's products and CO2;
- availability or timing of, or conditions imposed on, permits
and approvals necessary for drilling or development activities and
carbon management projects;
- changes in business strategy and CRC's capital plan;
- CRC's ability to realize the benefits contemplated by the
business strategies and initiatives related to energy transition,
including carbon capture and storage projects and other renewable
energy efforts;
- CRC's ability to successfully identify, develop and finance
carbon capture and storage projects and other renewable energy
efforts, including those in connection with the CTV;
- global geopolitical, socio-demographic and economic trends and
technological innovations;
- limitations on CRC's financial flexibility due to existing and
future debt;
- insufficient cash flow to fund CRC's capital plan and other
planned investments, stock repurchases and dividends;
- insufficient capital or lack of liquidity in the capital
markets or inability to attract potential investors;
- limitations on transportation or storage capacity;
- CRC's ability to successfully gather and verify data regarding
emissions, its environmental impacts and other initiatives;
- the compliance of various third parties with CRC's policies and
procedures and legal requirements as well as contracts it enters
into in connection with CRC's climate-related initiatives;
- climate-related conditions and weather events;
- disruptions due to accidents, mechanical failures, power
outages, transportation or storage constraints, natural disasters,
labor difficulties, cyber-attacks or other catastrophic
events;
- pandemics, epidemics, outbreaks, or other public health events,
such as the COVID-19; and
- other factors discussed in Part I, Item 1A – Risk Factors in
CRC's Annual Report on Form 10-K and its other SEC filings
available at www.crc.com.
CRC cautions you not to place undue reliance on forward-looking
statements contained in this document, which speak only as of the
filing date, and CRC undertakes no obligation to update this
information. This document may also contain information from third
party sources. This data may involve a number of assumptions and
limitations, and CRC has not independently verified them and do not
warrant the accuracy or completeness of such third-party
information.
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version on businesswire.com: https://www.businesswire.com/news/home/20230731171277/en/
Joanna Park (Investor Relations) 818-661-3731
Joanna.Park@crc.com
Richard Venn (Media) 818-661-6014 Richard.Venn@crc.com
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