Investment platform will form joint venture with Oxy subsidiary 1PointFive to develop STRATOS. [Image credit: 1PointFive]

By Dale Lunan

US major Occidental said November 7 investment platform BlackRock will invest $550mn on behalf of its clients in Occidental’s STRATOS project in Texas, a direct air capture (DAC) facility designed to scrub 500,000 tonnes/year of COfrom the atmosphere.

BlackRock, through a fund managed by its diversified infrastructure business, has agreed to form a joint venture with Occidental subsidiary 1PointFive that will own STRATOS. The technology being deployed at STRATOS was originally developed by Canada’s Carbon Engineering, which Occidental agreed to acquire earlier this year for $1.1bn.

“This joint venture demonstrates that direct air capture is becoming an investable technology and BlackRock’s commitment in STRATOS underscores its importance and potential for the world,” Occidental CEO Vicki Hollub said. “We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale direct air capture.”

Construction of STRATOS in Ector County Texas is about 30% complete and the facility is expected to enter commercial operations in mid-2025, a year later than initial estimates. Project costs are also rising, with the latest estimate from Occidental putting the price tag at $1.3bn, up from original estimates last year in the $800mn-$1bn range, according to a Reuters report.

Still, BlackRock is convinced of the role STRATOS and DAC can play in global decarbonisation efforts.

“STRATOS represents an incredible investment opportunity for BlackRock’s clients to invest in this unique energy infrastructure project and underscores the critical role of American energy companies in climate technology innovation,” BlackRock CEO Larry Fink said. 

In October, 1PointFive and Abu Dhabi National Oil Company began a jointly-funded preliminary engineering study for a DAC facility similar to STRATOS that would remove 1mn tonnes/year of CO2 from the atmosphere.