Chevron joins Bayou Bend CCS project for first offshore carbon capture hub in US Gulf

Chevron said May 3 it will take a 50% stake in what could become the first major carbon capture and storage hub in the shallow waters of the US Gulf of Mexico offshore of Texas.

The Bayou Bend CCS project was previously developed by Talos Energy and Carbonvert -- each of whom would retain 25% stakes -- to inject and store between 225 million mt and 275 million mt of CO2 from industrial sources along the US Gulf Coast over a 25- to 30-year period. The project would be focused on the shallow waters of the US Gulf near industrial hubs in Beaumont and Port Arthur, Texas.

While the US Gulf Coast is seen as a prime location for carbon capture because of its geology and proximity to refining and petrochemical corridors, the shallow waters of the US Gulf are increasingly considered potentially ideal for CCS projects. ExxonMobil also has placed bids on nearly 100 leases in Texas' shallow waters for potential CCS projects.

Although the project still has no set timeline, Chevron said its planned investment shows the seriousness of moving forward.

"This venture is an example of the potential that partnering can have in moving large-scale lower carbon projects forward," said Chris Powers, vice president of carbon capture and storage for Chevron New Energies. "Talos and Carbonvert have worked to rapidly advance this project, and as a priority project for Chevron in a key industrial area, we are excited to contribute our experience and capability to develop the leading offshore carbon sequestration hub for the region."

Despite the smaller ownership stake, Talos will remain the project operator. Last year, offshore producer Talos and Carbonvert, won a lease from the Texas General Land Office to develop the state's first carbon storage site in territorial waters off the coast of Jefferson County. They also are working with the sub-surface technology company TechnipFMC to develop the project.

Talos CEO Tim Duncan said Chevron brings expertise and financial might to the project.

"We believe the addition of Chevron greatly enhances the execution of this hub-scale project and we hope this sends a clear signal to industrial partners in the Beaumont and Port Arthur region that we are focused on making Bayou Bend the premier CCS project in southeast Texas," Duncan said in a May 3 statement.

The tentative first phase of the project would sequester between 4 million and 5 million mt/year of CO2, ultimately ramping up to 8 million to 10 million mt/year of CO2.

The principal natural resource of the CCS business is underground storage, whether the storage is onshore or offshore, and the geological character of the US Gulf Coast is ideal for the proliferation of CCS operations, industry officials contend.

Regulatory focus

Congress and the White House are increasingly paying attention to the potential of offshore carbon storage. Experts said during a US House subcommittee hearing in the week ended April 29 that the US Interior Department will need to create long-term liability rules for offshore carbon injection wells if the carbon capture and storage industry is going to fulfill its potential in the US.

The Biden administration's Infrastructure Investment and Jobs Act passed in 2021 instructs the Interior Department to develop a regulatory framework for offshore carbon sequestration on the outer continental shelf, or the ocean floor that falls under federal jurisdiction. In particular, the US Gulf is increasingly seen as a resource with immense subsurface carbon storage capacity capable of sequestering several gigatons of US emissions.

But deep-sea carbon storage has special challenges. Leaks, for instance, can have serious environmental and climate consequences, yet methodologies for monitoring well pressure or leakage are still under development.

While project operators hold responsibility for the carbon well during the life of the project -- which typically lasts for 15 to 30 years -- there remains an open question as to who holds liability over the well after an offshore lease expires. And that uncertainty can inhibit companies from jumping into the offshore carbon business.

According to Tip Meckel, a research scientist at the University of Texas, the US Gulf Coast is home to 1,500 offshore wastewater injection wells, which, if repurposed for carbon storage, have the capacity to store a gigaton of CO2 annually.