Blackrock, Oxy Form JV for Carbon Capture Facility

BlackRock’s diversified infrastructure business will invest $550 million on behalf of clients in a joint venture with oil and gas giant Occidental Petroleum to construct STRATOS, the world’s largest Direct Air Capture (DAC) plant.

The facility will be built in Ector County, TX. STRATOS, which is meant to capture up to 500,000 tons of CO2 per year, will be owned by Occidental’s subsidiary 1PointFive. The facility is scheduled to go into commercial operation in mid-2025.

“STRATOS represents an incredible investment opportunity for BlackRock’s clients to invest in this unique energy infrastructure project and underscores the critical role of American energy companies in climate technology innovation,” said Larry Fink, chairman and CEO, BlackRock.

STRATOS was formed to provide low-cost solutions that corporations in difficult-to-decarbonize industries may utilize in combination with their own emissions-reduction efforts.

So far this year, 1PointFive has announced many high-profile pre-purchase agreements, with corporate buyers stepping up to acquire carbon credits. Amazon, Airbus, All Nippon Airways, TD Bank Group, and Houston Texans and Astros have all purchased credits, with the most prominent agreements being 400,000 credits for Airbus and 250,000 credits for Amazon.

The investment comes in the wake of major advances in the DAC market. In August, the government announced a $1.2 billion funding package for two DAC hubs in Texas and Louisiana, citing the technology as an important element of the solution to reducing CO2 emissions.