HOUSTON, TEXAS (Ofelia Paredes, Energy Analytics Institute, 16.May.2025, Words: 487) — Occidental (Oxy) and its subsidiary 1PointFive reached an agreement with XRG, ADNOC‘s investment company, to evaluate a potential joint venture (JV) to develop a Direct Air Capture (DAC) facility in South Texas.
The strategic DAC framework agreement was signed by Occidental President and CEO Vicki Hollub and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber, during US President Donald J. Trump’s state visit to the United Arab Emirates (UAE).
As part of the JV, XRG will consider investing up to $500mn for the development of a DAC facility designed to capture 500,000 tonnes of carbon dioxide per year, Oxy announced on 16 May 2025 in an official statement.
“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 US energy independence and global goals. Agreements like this, along with US DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas,” Hollub said in the statement.
The announcement follows several significant milestones in the development of DAC, including Oxy’s progress on STRATOS, its first DAC facility in West Texas, which is on-track to start commercial operations in 2025; further de-risking of Oxy’s DAC technology; and an award from the US Department of Energy for up to $650mn to support development of the South Texas DAC Hub.
Oxy and ADNOC have been discussing opportunities to collaborate on carbon capture, utilization and storage projects in the United States and UAE since signing a memorandum of understanding (MOU) in 2023.
The South Texas DAC Hub, located on the King Ranch in Kleberg County, Texas, will be close to industrial facilities and energy infrastructure along the US Gulf Coast, where CO2 can be transported for use or securely stored in geologic formations. The site comprises 165 square miles of acreage with the potential to store up to 3 billion tonnes of carbon dioxide (CO2). The first DAC facility at the Hub is expected to capture 500,000 tonnes of CO2 per year and is currently in front-engineering and design, according to Oxy.
XRG focuses on transformational global investments that create value across natural gas, chemicals and lower-carbon energy solutions. Occidental and ADNOC have a long-standing partnership at Al Hosn Gas, one of the largest Middle Eastern natural gas developments, and onshore oil and gas development projects in the UAE.
“Our longstanding partnership with Occidental continues to drive scalable, high-growth and strategically attractive projects that create long-term sustainable value. The US 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.” XRG chief operating officer Khaled Salmeen said in the statement.
____________________
By Ofelia Paredes reporting from Houston. © 2025 Energy Analytics Institute (EAI). All Rights Reserved.
