Occidental Petroleum (OXY) is buying Canadian start-up Carbon Engineering for $1.1 billion U.S. as it focuses on efforts to remove carbon dioxide from the atmosphere.
Occidental Petroleum said it will pay cash for privately held Carbon Engineering and expects the deal to close before the end of this year, pending regulatory approvals.
Occidental has partnered with Carbon Engineering for the last four years, using its technology at its West Texas-based Stratos project, set to be the world’s largest carbon dioxide capture plant by 2025.
Carbon capture is one of the energy industry’s favourite climate solutions. The U.S. government is offering generous tax incentives for the technology through the federal Inflation Reduction Act.
Occidental’s purchase of Carbon Engineering is the second major deal in carbon capture in recent weeks.
In July, Exxon Mobil (XOM) agreed to buy CO2 pipeline operator Denbury for $4.9 billion U.S.
Occidental Petroleum said it plans to also use Carbon Engineering’s technology at its King Ranch hub planned for south Texas, which recently won financial backing from the U.S. Department of Energy.
Occidental Petroleum’s stock has gained 4% this year to trade at $63.55 U.S. per share.
