Denbury Inc. announced that its wholly-owned subsidiary, Denbury Carbon Solutions, LLC, and Houston-based Gulf Coast Midstream Partners, LLC have executed a non-binding letter of intent and term sheet for the permanent sequestration of CO2 in a planned underground storage project southwest of Houston, Texas. The project is currently being developed by GCMP’s wholly-owned subsidiary, Gulf Coast Carbon Solutions, LLC and the arrangement contemplates Denbury participating as an equity investor alongside GCMP with up to 50% equity ownership in the project. Denbury’s election of its equity ownership level will be determined prior to the execution of final agreements.
Located just 25 miles from Denbury’s existing CO2 Green Pipeline, the project site is ideally positioned to sequester large volumes of CO2 from Gulf Coast industrial emissions sources. Total CO2 storage capacity is estimated to be up to 400 million metric tons, with potential to begin sequestration by early 2025. Initial injection rates are anticipated to be 1.5 million metric tons per year, with the ability to increase capacity up to 9 MMTPA to meet anticipated market demand. GCMP has already initiated the Class VI permitting process with the U.S. Environmental Protection Agency for the project.
Chris Kendall, Denbury’s President and Chief Executive Officer, commented, “Today’s announcement with GCMP reinforces Denbury’s strategy of providing low cost, safe and reliable permanent storage for captured industrial CO2 emissions. Not only does this project provide significant near-term storage potential, the western extension of our Gulf Coast CO2 pipeline infrastructure enhances CO2 offtake and storage access for industrial facilities in the southwest Houston area. We are excited to work with GCMP on this significant storage project.”
John M. Hopper, GCMP’s Chief Executive Officer, said that “We are very pleased to partner with Denbury in our carbon sequestration project. Denbury’s world-class CO2 transportation infrastructure and CO2 management skill set are an ideal complement to GCMP’s underground storage development and operations expertise. Together, GCMP and Denbury are well-positioned to offer a bundled CO2 transportation and permanent sequestration service to meet the evolving needs of the carbon capture sequestration market.”