Denbury Provides CCUS Update, Including 2022 Goals and Multiple New Agreements
Denbury Inc. (NYSE: DEN) has updated its progress in carbon capture, utilization, and storage (CCUS) through its Denbury Carbon Solutions division. The company aims to secure agreements for over 10 million metric tons of captured CO2 emissions annually and establish storage sites with a capacity of at least 1.2 billion tons of CO2 by the end of 2022. Key agreements include leasing pore space in Louisiana with a capacity for 150 million tons of CO2 and collaborating with Infinium on ultra-low carbon fuels, highlighting Denbury's growth potential in the CCUS sector.
- Establishment of agreements for CO2 transportation and storage expected to reach over 10 million metric tons annually.
- Significant CO2 sequestration site leased in Louisiana with a capacity exceeding 150 million metric tons.
- Collaboration with Infinium to develop ultra-low carbon fuels, indicating diversification and innovation.
- None.
The Company’s 2022 goals for Denbury Carbon Solutions that will further advance the Company’s vision of leading the energy transition with world-class carbon solutions include:
- Reach agreements for transportation and storage of captured industrial CO2 emissions totaling in excess of a cumulative 10 million metric tons of CO2 per year (mmtpa);
- Secure CO2 sequestration sites in strategic locations with an aggregate storage potential of at least 1.2 billion tons of CO2; and
- Progress pre-development activities on multiple potential sequestration sites, with Class VI permitting processes commenced during 2022.
The above volumetric targets are inclusive of all prior agreements announced, including those executed in 2021 and thus far in 2022.
2022 SEQUESTRATION SITE AGREEMENTS
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Denbury has signed a definitive agreement with a large landowner to lease a substantial pore space position just east ofDonaldsonville, Louisiana , with an estimated sequestration capacity of more than 150 million metric tons of CO2. The sequestration site is less than 10 miles from the Company’s Green Pipeline, with excellent geologic characteristics supporting high CO2 injectivity and extensive sealing formations. First injection at the site is targeted as early as 2025. The site is in close proximity to one of the highest geographic concentrations of industrial CO2 emissions in theU.S. -
The Company previously announced that it signed a definitive agreement for the exclusive rights to develop a CO2 sequestration site near
Mobile, Alabama .Denbury estimates the total CO2 storage potential of this site to be over 300 million metric tons. This site is anticipated to initially anchor development of a CO2 sequestration hub in theMobile Bay area targeting existing and newbuild projects. The Company estimates that the site could be ready to receive CO2 injection by 2026. Depending on the pace and scale of regional CCUS development,Denbury may consider expanding its Gulf Coast CO2 pipeline network to connect to this site.
The cumulative CO2 sequestration potential secured by
2022 TRANSPORTATION, STORAGE & UTILIZATION AGREEMENTS
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The Company executed a term sheet for the transportation and storage of CO2 from an existing chemicals plant located in
Louisiana , less than 15 miles from the Company’s Green Pipeline. The agreement covers a 12-year timeframe, commencing as early as 2025, and provides for an additional extension period subject to mutual agreement by both parties. Annual CO2 volumes are estimated to be 0.4 mmtpa, andDenbury is provided flexibility under the agreement to utilize the CO2 in either enhanced oil recovery or direct sequestration. -
Denbury also executed a term sheet with a developer that intends to build a hydrogen plant inWyoming within 5 miles of Denbury’s pipeline infrastructure in theRocky Mountains . Volumes of CO2 are anticipated to commence at 0.1 mmtpa as early as 2024, growing to more than 1 mmtpa over a multi-year period. The agreement is for 20 years with options to extend.Denbury currently plans to utilize this CO2 in its enhanced oil recovery operations. -
The Company announced that it has entered into a strategic alliance with clean fuels innovator
Infinium to collaborate on developing ultra-low carbon fuels projects inBrazoria County, Texas .Infinium electrofuels are a direct replacement for traditional jet fuel and diesel. The electrofuels facilities inTexas will convert renewable power into ‘green’ hydrogen and combine it with industrial-sourced CO2 to produce ultra-low carbon transport fuels. Under the arrangement,Denbury will source and transport captured industrial CO2 to theInfinium facilities, which are planned to be sited in close proximity to Denbury’s existing and planned CO2 pipeline infrastructure, beginning as early as 2025. TheInfinium facilities are anticipated to utilize up to 1.5 million tons of CO2 per year.Denbury has an equity investment option in the projects.
Denbury’s cumulative CO2 transportation, storage and utilization agreements currently cover approximately 5 million metric tons of CO2 per year.
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The Denbury Carbon Solutions team was formed in
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This press release uses the term “agreement” to refer to both executed definitive agreements and executed term sheets covering various CCUS arrangements. These arrangements are subject to technical and feasibility evaluations, and in the case of certain of the CO2 transportation, utilization and storage term sheets, the building of new industrial facilities in future years.
This press release contains forward looking statements that involve risks and uncertainties, including the nature and extent of agreements reached with nearby emission capture facilities, along with the results of Denbury’s pre-injection period tests and assessments. These statements are based on engineering, geological, financial and operating assumptions that management of both parties believe are reasonable based on currently available information; however, their achievement are subject to a wide range of business risks, and there is no assurance that these goals and projections can or will be met. Actual results may vary materially. In addition, any forward-looking statements represent the parties’ estimates only as of today and should not be relied upon as representing its estimates as of any future date. The parties assume no obligation to update these forward-looking statements.
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