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Project Aims to Sequester Initial 100,000 Metric Tons of CO2 Per Annum in 2025
LONG BEACH, Calif.–(BUSINESS WIRE)–California Resources Corporation (NYSE: CRC) today announced a Carbon Dioxide Management Agreement (CDMA) between Carbon TerraVault JV Holdco, LLC (CTV JV) and Lone Cypress Energy Services, LLC (Lone Cypress), an independent energy company focused on the development of low-carbon hydrogen generation facilities and energy infrastructure, to sequester 100,000 metric tons (MT) of carbon dioxide (CO2) per annum from a newly constructed blue hydrogen plant at the Elk Hills Field in Kern County. Called the Lone Cypress Hydrogen Project, the project aims to be California’s first blue hydrogen facility producing 30 tons per day and has the potential to expand to 60 tons per day of blue hydrogen with up to 200,000 MT of CO2 sequestration per annum.
Blue hydrogen is a net zero-carbon intensity fuel produced from natural gas. The CO2 generated during the methane reforming process is captured and will be stored permanently underground.
“We are excited to be at the forefront of the energy transition in California. CRC is enabling the net zero energy economy by partnering with Lone Cypress to site a brand-new hydrogen facility at our Elk Hills Field as well as offering permanent CO2 sequestration through Carbon TerraVault,” said Mac McFarland, CRC’s President and Chief Executive Officer. “Because capture and compression are built into the project development, we anticipate limited capital requirements from the CTV JV and EBITDA per metric ton within our previously stated range. This CTV storage project is a meaningful step forward in CRC’s rollout of carbon capture and sequestration technology across the state and is the first of, what we believe, will be many projects to come. We are also excited about the ability to leverage our Elk Hills asset to create a Net Zero Industrial Park by combining green field development and carbon sequestration.”
CDMA Highlights:
“Partnering with CTV JV represents an incredible opportunity to continue the growth of our hydrogen and carbon capture businesses. California is at the forefront of the global energy transition and through this partnership, we intend to be a leader in its low-carbon fuels market,” said Greg Brooks, President and Founder of Lone Cypress Energy Services. “CTV’s unique expertise in subsurface operations and permitting, large CO2 storage position and ability to deliver on highly complex and capital-intensive projects provide us with a clear line of sight as we continue to evaluate additional projects in California. We are excited to generate the first blue hydrogen molecule in the state of California and provide the market with a low-cost low-carbon option to meet its decarbonization goals.”
In line with Governor Newsom’s recently announced climate measures, the construction process of the new Lone Cypress Hydrogen Project and associated CCS infrastructure is expected to provide at its peak approximatively 125 temporary construction jobs and 18 permanent technical jobs, further benefitting California’s economy and supporting the state’s leading climate goals.
About Carbon TerraVault Joint Venture
Carbon TerraVault Joint Venture (CTV JV) is a carbon management partnership focused on carbon capture and sequestration development, and was formed between Carbon TerraVault (CTV), a subsidiary of CRC, and Brookfield Renewable. The CTV JV develops both infrastructure and storage assets required for CCS development in California. CRC owns 51% of the CTV JV with Brookfield Renewable owning the remaining 49% interest.
About California Resources Corporation
California Resources Corporation (CRC) is an independent oil and natural gas company committed to energy transition in the sector. CRC has some of the lowest carbon intensity production in the US and CRC is focused on maximizing the value of our land, mineral and technical resources for decarbonization by developing CCS and other emissions reducing projects. For more information about CRC, please visit www.crc.com.
About Lone Cypress Energy Services
Lone Cypress Energy Services, LLC is an independent energy company focused on the development and operation of infrastructure across the entire energy value chain. Headquartered in Tulsa, OK, Lone Cypress offers a full suite of technology-enabled solutions including project development, project management, EPC contracting, and asset operations. Lone Cypress specializes in the development of hydrogen generation and distribution projects, waste to energy plant solutions, and traditional oil and gas midstream facilities. For more information, please visit www.lonecypressenergyservices.com.
Forward-Looking Statements
This document contains statements that CRC believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts are forward-looking statements, and include statements regarding CRC’s future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and plans and objectives of management for the future. Words such as “expect,” “could,” “may,” “anticipate,” “intend,” “plan,” “ability,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “guidance,” “outlook,” “opportunity” or “strategy” or similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.
Although CRC believes the expectations and forecasts reflected in CRC’s forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond CRC’s control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause CRC’s actual results to be materially different than those expressed in CRC’s forward-looking statements include:
CRC cautions you not to place undue reliance on forward-looking statements contained in this document, which speak only as of the filing date, and CRC undertakes no obligation to update this information. This document may also contain information from third party sources. This data may involve a number of assumptions and limitations, and CRC has not independently verified them and do not warrant the accuracy or completeness of such third-party information.
Contacts
Joanna Park (Investor Relations)
818-661-3731
Joanna.Park@crc.com
Richard Venn (Media)
818-661-6014
Richard.Venn@crc.com
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