Occidental Petroleum Corp. announced that European aircraft-maker Airbus SE has committed to buying carbon credits from a planned Permian Basin direct air capture facility.

Airbus will purchase credits for 100,000 tonnes per year of carbon that the Permian plant removes from the air. The company committed to buying four years of carbon credits, with an option for more.

The new facility is being built by 1PointFive Inc., Occidental's low-carbon unit, using technology developed by Carbon Engineering Ltd. It will extract carbon dioxide from the atmosphere and sequester it in underground caverns, the independent oil and gas producer said. Construction is scheduled to begin later this year.

When fully operational, the plant will be able to extract 1 million tonnes of CO2 annually.

Occidental made the announcement after markets closed March 17 and ahead of a March 23 investors day for its low-carbon ventures business.

The amount Airbus is paying for the carbon credits was not disclosed.

"We think most investors don't ascribe much value (if any, us included) currently to the business," Matt Portillo, a managing director for research at energy investment bank Tudor Pickering Holt & Co., said. "Announcements like these, and fleshing out more detail on such announcements, could prove to be a catalyst towards investors baking in that value."

The project's timing coincides with the deployment of federal infrastructure spending on climate change, credit research firm CreditSights' senior analyst for energy and infrastructure Charles Johnston told clients March 18.

"1PointFive hasn't provided project costs yet, but Occidental expects the majority of capital will be externally funded and a number of options are being explored on this front, including third-party equity investments, CO2 credit commitments, and commitments to purchase the low-carbon crude produced using direct air capture CO2," CreditSights said.