ADNOC’s XRG and Occidental plan carbon capture JV

HOUSTON, May 16, 2025 – ADNOC investment arm XRG has signed an agreement with Occidental and subsidiary 1PointFive to evaluate a joint venture for a direct air capture (DAC) hub in South Texas, the companies announced on Friday.

Under the framework agreement, XRG will consider investing up to USD 500 million to support a facility capable of capturing 500,000 tonnes of carbon dioxide annually. The project is part of the South Texas DAC Hub located at King Ranch in Kleberg County, close to industrial infrastructure on the Gulf Coast, and includes 427 square kilometres of storage-ready acreage with a potential to sequester up to 3 billion tonnes of CO2.

The deal was formalised during a state visit to the UAE by US President Donald Trump and marks a continuation of Occidental’s partnership with ADNOC, which began with a memorandum of understanding signed in 2023. The US Department of Energy has awarded up to USD 650 million to support the hub’s development.

“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,” Occidental president and CEO Vicki Hollub said.

“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.

Occidental is a US-based international energy company with upstream and midstream operations across the USA, Middle East and North Africa. It owns Oxy Low Carbon Ventures, which develops carbon reduction technologies, and in 2023 it acquired British Columbia-based DAC technology developer Carbon Engineering for USD 1.1 billion.

Today, Occidental and Carbon Engineering work together with 1PointFive, Occidental’s CCUS-focused unit, to introduce DAC solutions at commercial scale worldwide.

Launched in late 2024, XRG is a global energy investment company headquartered in Abu Dhabi and wholly owned by ADNOC. With an enterprise value of over USD 80 billion, XRG focuses on lower-carbon energy, natural gas and chemicals, and aims to accelerate the transition to a more sustainable energy future. The company invests in transformative and strategically important energy projects that span the entire value chain. Its portfolio includes equity in industry-leading entities driving innovation in energy infrastructure, carbon management and advanced fuel technologies. XRG’s activities are closely aligned with ADNOC’s commitment to responsible energy production and the development of global partnerships that advance climate goals.

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Image courtesy of Carbon Engineering

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