BKV Announces FID on Carbon Capture Project with Leading Midstream Operator

Rhea-AI Summary

BKV (NYSE: BKV) has announced a strategic partnership to develop a new carbon capture and sequestration (CCS) facility at a natural gas plant in South Texas. The project, which reached final investment decision in December 2024, will involve BKV purchasing CO2 waste from the plant near Freer, which processes Eagle Ford Shale gas.

The facility is expected to be fully operational in Q1 2026, with a projected sequestration rate of 90,000 metric tons per year of CO2 equivalent. The Texas Railroad Commission has approved the project's Class II injection well, and a monitoring plan is awaiting EPA approval.

This project joins BKV's existing CCUS portfolio, including the operational Barnett Zero site and the upcoming Cotton Cove CCS project, supporting the company's goal of achieving net-zero emissions from its upstream and midstream operations.

Positive

• Strategic partnership with major midstream operator expands CCS portfolio
• Project expected to sequester 90,000 metric tons of CO2 annually
• Texas Railroad Commission approval already secured for injection well
• Adds to existing operational CCS facilities, strengthening environmental portfolio

Negative

• Project completion dependent on pending EPA permit approvals
• Full operations not expected until Q1 2026
• Financial terms and investment costs not disclosed

Insights

Energy Infrastructure Analyst

This strategic CCS partnership represents a significant milestone in BKV's evolution as an energy transition leader. The 90,000 metric tons annual CO2 sequestration capacity creates substantial value through multiple channels: carbon credit generation, regulatory compliance advantages, and strategic positioning in the rapidly growing CCS market.

The project's location in the Eagle Ford Shale is particularly strategic, as it creates a blueprint for regional CCS infrastructure development. By securing early-mover advantages in this key production basin, BKV is establishing valuable infrastructure and expertise that creates significant barriers to entry for competitors. The partnership with a major midstream operator also provides important operational synergies and potential for future project scaling.

The timing of this FID is optimal, coinciding with the enhanced 45Q tax credits under the Inflation Reduction Act, which provides 85 per metric ton for permanent CO2 sequestration. This could generate approximately 7.65 million in annual tax credits once fully operational. The project's integration with existing natural gas processing infrastructure significantly reduces capital requirements and operational risks compared to greenfield CCS projects.

BKV's expanding CCS portfolio, which includes the operational Barnett Zero site and the upcoming Cotton Cove project, demonstrates a systematic approach to building a comprehensive carbon management business. This diversification across multiple sites reduces single-project risk while creating valuable operational learnings that can be applied to future projects.

The regulatory progress, including Texas Railroad Commission approval and pending EPA verification, indicates strong project execution capabilities. This expertise in navigating the complex regulatory landscape of CCS projects represents a significant competitive advantage as the industry scales up to meet growing decarbonization demands.

DENVER--(BUSINESS WIRE)-- BKV Corporation (“BKV” or the “Company”) (NYSE: BKV) today announced a strategic partnership with a leading diversified midstream energy company to develop a new carbon capture and sequestration (“CCS”) facility at a currently operating natural gas plant in South Texas. This partnership underscores BKV’s commitment to reducing its emissions footprint through the development of profitable CCS assets and sets the stage for collaboration on future projects between the two companies.

The natural gas processing plant, located near the city of Freer in south Texas, processes natural gas produced in the Eagle Ford Shale. Under the announced partnership, BKV will purchase the carbon dioxide (“CO₂”) waste stream from the plant, which will then be compressed, transported and permanently sequestered via BKV’s injection well at an adjacent site. BKV will retain the environmental attributes associated with the CCS project. The Texas Railroad Commission has approved the project’s Class II injection well and a monitoring, reporting and verification (“MRV”) plan has been submitted to the United States Environmental Protection Agency for approval. The project reached a final investment decision (“FID”) in mid-December 2024. When the project is fully operational, which is expected in the first quarter of 2026 (subject to receipt of all required permits), the facility is forecasted to achieve an average sequestration rate of approximately 90,000 metric tons per year of CO₂ equivalent.

The new CCS facility adds to BKV’s carbon capture, utilization and sequestration (“CCUS”) portfolio, which includes the operational CCS facility at the Company’s Barnett Zero site in north Texas and the Cotton Cove CCS project, which has reached FID and is expected to begin initial sequestration operations in the first half of 2026.

“This new CCS project addition to our portfolio further demonstrates our commitment to achieving net-zero emissions from our owned and operated upstream and natural gas midstream businesses and showcases the execution of our differentiated business model to make this vision a reality,” said Chris Kalnin, Chief Executive Officer of BKV. “Collaborating with one of the largest energy companies in the United States is critical for advancing our closed loop, net-zero strategy of deploying profitable CCUS assets. We are thrilled at the opportunity to continue deployments of our emissions reduction technology.”

About BKV Corporation
Headquartered in Denver, Colorado, BKV Corporation (BKV) is a forward-thinking, growth-driven energy company focused on creating value for its stockholders. BKV's core business is to produce natural gas from its owned and operated upstream assets. BKV’s overall business is organized into four business lines: natural gas production; natural gas gathering, processing and transportation; power generation; and carbon capture, utilization and sequestration. BKV (and its predecessor entity) was founded in 2015, and BKV and its employees are committed to building a different kind of energy company. BKV is one of the top 20 gas-weighted natural gas producers in the United States and the largest natural gas producer by gross operated volume in the Barnett Shale. BKV Corporation is the parent company for the BKV family of companies. For more information, visit the BKV website at www.bkv.com.

Forward-Looking Statements
The information in this press release includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are not historical facts, include statements regarding BKV’s strategy, future operations, prospects, plans and objectives of management, and often contain words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “seek,” “envision,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” “will,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements discussed in BKV’s filings with the United States Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of the prospectus filed by BKV with the SEC on September 27, 2024. BKV undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

SOURCE: BKV Corporation

View source version on businesswire.com: https://www.businesswire.com/news/home/20250213592412/en/

For BKV

Media Contact

Becky Escott

BKV Corp.

Director, Corporate Communications

media@bkvcorp.com

Investor Contacts

David Tameron

BKV Corp.

Vice President, Investor Relations

ir@bkvcorp.com

Source: BKV Corporation

FAQ

What is the expected CO2 sequestration capacity of BKV's new South Texas CCS facility?

The facility is forecasted to achieve an average sequestration rate of approximately 90,000 metric tons per year of CO2 equivalent when fully operational.

When will BKV's new South Texas CCS facility begin operations?

The facility is expected to become fully operational in the first quarter of 2026, subject to receipt of all required permits.

Where is BKV's new CCS facility located?

The new CCS facility will be located near the city of Freer in South Texas, processing natural gas from the Eagle Ford Shale.

What regulatory approvals has BKV received for its South Texas CCS project?

The Texas Railroad Commission has approved the project's Class II injection well, and a monitoring, reporting and verification plan has been submitted to the EPA for approval.

How many CCS projects does BKV now have in its portfolio?

BKV now has three CCS projects: the operational Barnett Zero site in north Texas, the upcoming Cotton Cove CCS project, and this newly announced South Texas facility.