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Mexico’s president said Saturday he hopes for construction of the Jaltipán-Salina Cruz natural gas pipeline to be complete within a year at the most.

The proposed 500 MMcf/d pipeline would span the Tehuantepec Isthmus, from Chinameca, Veracruz, to Salina Cruz, Oaxaca, where the government is planning a 3 million metric tons/year floating liquefied natural gas (LNG) export terminal.

State power company Comisión Federal de Electricidad (CFE), which is overseeing both projects, still must obtain the necessary rights-of-way for the pipeline to go forward, said President Andrés Manuel López Obrador during a speech in Salina Cruz.

Once the pipeline is in place, the government plans to conduct a tender for construction of the floating storage and production unit (FSRU), said the president, who is known by his initials AMLO.

“There is an agreement to put a liquefaction plant in Salina Cruz,”he said, though he did not name the parties involved.

CFE last year sought formal expressions of interest from firms in building and operating the pipeline and terminal. No announcement has been made as to which firm might undertake the project.

By developing an LNG export terminal on the Pacific Coast, CFE is aiming to export gas sourced via its extensive pipeline network to consumers in Asia. “We have a gas contract that allows us to have sufficient volumes to export to Asia, but we have it in the Gulf [of Mexico] and we need a pipeline so that here in Salina Cruz, we can build a liquefaction plant,” the president said.

The FSRU would require investment of 60 billion pesos, or about $2.93 billion, said López Obrador. 

The Salina Cruz terminal is one of several LNG export projects under development or proposed on Mexico’s Pacific Coast meant to capitalize on demand in Asia for North American LNG.

Imports account for 84% of Mexico’s gas consumption as of February, excluding the gas that state oil company Petróleos Mexicanos (Pemex) produces and consumes itself. 

Experts, however, remain skeptical about the logistics and economics behind re-exporting U.S. gas from Salina Cruz specifically.

“I absolutely do not see it is feasible because there is no way to bring gas all the way down there,” independent energy analyst Rosanety Barrios told NGI. “It requires substantial improvement in the current gas infrastructure and compressor stations. Nobody is doing anything in this sense.”

Barrios said that Sempra’s proposed Vista Pacífico terminal in Topolobampo, Sinaloa, or Mexico Pacific Ltd.’s project planned for Puerto Libertad, Sonora, would make more economic sense.

Even with sufficient infrastructure in place, the transport costs required to move gas from the United States to Salina Cruz would make it difficult for the terminal to be competitive, Barrios explained.

Mexico City-based analyst Gonzalo Monroy expressed a similar view, noting that the idea of an LNG export terminal in Salina Cruz has been under discussion for years.

The original idea was to source the gas from Pemex production in southeastern Mexico. The problem is that Pemex now consumes most of the gas it produces to stimulate oil production and for other internal processes.

“And in that regard…López Obrador is reviving an old idea which still lacks all the infrastructure, all the economic logic,” Monroy told NGI.

The government also plans to invest 60 billion pesos, via Pemex, in a coker unit at the Salina Cruz refinery. The coker unit, FSRU and gas pipeline are all part of López Obrador’s larger Tehuantepec Isthmus Interoceanic Corridor project. 

NATURAL GAS INTELLIGENCE by Andrew Baker, June 27, 2022

Gazprom cuts supplies of gas as Europe races to fill its storage tanks. These crossed the halfway mark on June 7 and are now 51.12% full, as the EU seeks to replenish its supplies ahead of the coming winter. That race became even more poignant after Russia’s state-owned gas behemoth Gazprom cut supplies to Europe, claiming Siemen’s failure to return compressor units on time has forced the Russian company to reduce supplies by 60%.

The pumping of gas into European underground gas storage facilities in May not only reached a record level for this month, but hit the highest level since records started in 2011, according to Gas Infrastructure Europe (GIE). LNG imports to Europe also reached a record level last month.

Some 15.6bn cubic metres of gas were pumped into European storage facilities in May, up by 52% compared with last year’s pumping in the same period and by 11.5% compared with the previous record of May 2018.

Europe went into last year’s heating season, which starts on October 1, with the lowest levels of gas in storage in many years. Tanks were only 74% full on October 1, 2021 against the 80%-95% that was usual in previous years.

However, extra supplies of LNG from the US and Qatar combined with a relatively mild winter meant that the EU scraped through the season, which ended on March 31. European tanks were still 26.3% full on that day, well ahead of the 10%-12% that analysts feared might be left.

The distribution of gas storage in Europe is not even. The Polish gas tanks, for example, are already 96% full and a new pipeline bringing gas from Norway to Poland is due to come online at the start of October, making Poland the first European country to entirely break its dependence on Russian gas. Portugal’s tanks were also over 90% full by June, although Portugal relies heavily on LNG imports and is not an integral part of the European gas pipeline network.

The UK, Czechia and Denmark gas tanks are also just over 70% full, putting them in comfortable positions. However, many other EU countries have far less, with Sweden at the bottom of the list with only 10% and Croatia and Bulgaria both with less than 30%.

However, the key countries of German and Italy have 55.95% and 53.9% respectively and are by far the biggest consumers of gas. As Germany is home to the largest gas tanks in Europe it acts as a EU distribution hub for gas. It already has enough to meet its domestic needs in this coming winter and the excess can be distributed to other EU countries as demand requires. Between them German and Italy already account for more than 40% of all the gas in storage in Europe.

Ukraine has even bigger storage facilities and is a major source of gas during the winter, but its tanks are only 18.6% full as of June 16. Still, even at low levels the gas in storage in Ukraine is already equal to more than 10% of all gas stored in Europe.

Gazprom cut off

Gazprom reported on June 14 it was reducing gas supply via Nord Stream 1 to 100mn cubic metres per day, down from a previous plan of 167 mcm per day. Russia said that the technical watchdog Rostekhnadzor had ordered a temporary halt as parts to repair some Siemens equipment were unavailable due to Western sanctions. As a result, only three gas-pumping units remain in operation, it said.

Gazprom’s “technical problems” come after it halted deliveries to some European countries after companies in Bulgaria, Denmark, Finland, the Netherlands, and Poland refused to pay for natural gas in rubles, as demanded by the Russian government.

Gas transit to Europe via Ukraine has also been caught up in the war and deliveries via Sokhranivka in Ukraine that normally account for a third of the total were taken offline in May as the war affected Ukraine’s gas transit business for the first time. The Gas Transmission System Operator of Ukraine (GTSOU) said it had taken the station offline as it was now in Russian occupied territory.

Deliveries to Europe via Ukraine slumped to 9 bcm from 14 bcm between January and April this year compared with the same period a year earlier.

Gazprom was transiting the maximum allowed volumes of about 109 mcm per day for two months after the war in Ukraine started in February, and used the reserved capacity in full until the end of March 2022.

Europe has been replenishing its storage tanks at the fastest rate in many years. At the end of winter Brussels ordered that the tanks be 90% full by the start of the heating season, just as the debate on shutting off Russian gas deliveries to Europe completely was gathering steam. That goal was later revised down to 80%, but the pace has been relentless.

The fast pace has been fed by record deliveries of LNG to Europe. The US made 15 bcm available and has diverted some of its deliveries from Asia to ensure that its allies in Europe have enough gas before the winter.

LNG supplies from terminals to Europe’s gas transport system in May hit a record high for the month, reaching 10.8 bcm, which exceeds the previous record of 10.27 bcm of May 2020. LNG reserves in EU states are 13% higher now than in 2021, and 12% higher than a five-year average.

The Grain LNG terminal in the UK, the largest in Europe and eight-largest in the world, posted record gas send-out levels in April, as high demand for gas from Europe pushed utilisation rates up, with LNG tankers arriving from eight new countries since January. The terminal saw its highest ever utilisation rate in April, sending out an average of 431 GWh per day, more than the previous high of 412.2 GWh in April 2021, reports bne IntelliNews’ sister publication Newsbase.com.

Total LNG deliveries to Europe’s gas transport system have reached around 52.45 bcm year-to-date. To compare, Gazprom exported 61 bcm of gas to non-CIS states (including China) in the same period.

And Europe’s LNG capacity will only grow. In the wake of Russia’s invasion of Ukraine, a raft of new LNG import projects have been proposed across Europe, while a number of pre-invasion projects that once were considered to have a questionable economic case are now moving forward swiftly.

The flood of gas entering Europe has also taken the pressure off prices which soared 20-fold during the worst of the European gas crisis that started last summer.

However, LNG deliveries to Europe from the US will likely slow following an explosion at the US Freeport terminal in Texas this month. Freeport LNG, one of the largest sources of US LNG exports, is due to remain shut for three weeks, and the downtime could be longer given that the extent of the damage is yet to be determined, Rystad Energy said in a note. The plant had been running at close to its capacity in recent months, helping Europe offset recent disruptions in Russian supply.

The bulk of Freeport LNG’s output had been heading to Europe before the incident – rising from 40% in March to close to 60% in May. The plant has been able to quickly divert extra supply to Europe amid soaring prices and Moscow’s invasion thanks to the fact that most of its capacity is uncontracted.

Who dunnit?

Gazprom was accused of squeezing gas supplies to Europe last year and exacerbating the gas crisis to put pressure on the EU to sign off on new long-term gas contracts the Kremlin needs to develop its vast Yamal gas deposits.

Gazprom made a point of sticking scrupulously to the terms of its supply contracts at a time when shortage and panic had sent gas spot prices through the roof.

Now some observers say that Gazprom is again using gas as a political weapon in Russia’s confrontation with the West with the goal of making sure that Europe does not have enough gas in storage before the heating season starts in October.

However, with Europe’s tanks, and especially those in Germany and Italy, half full by June it seems that Europe is on course to have enough gas ready to use in five months’ time.

Gazprom’s slowdown in delivery – and the Nord Stream 1 pipeline is due for its annual maintenance break in July – also can be seen as a threat of the Kremlin deciding to unilaterally cutting Europe off from gas as part of its clash with the West. This scenario is considered highly unlikely by analysts as although it would cause a gas crisis in Europe, the deliveries would not be restarted and the Kremlin would have to forego significant amounts of revenue it currently badly needs to finance its war.

bne INTELLINEWS, by Ben Aris, June 24, 2022

The Federal Trade Commission (FTC) announced a consent agreement requiring divestitures as a condition of Buckeye Partners, L.P.’s (Buckeye’s) $435 million acquisition of 26 petroleum terminals from Magellan Midstream Partners, L.P. (Magellan). Petroleum terminals are a component of the supply chain for gasoline, diesel, and jet fuel. The FTC alleges the acquisition would increase prices for terminaling services and make collusive conduct between the markets’ remaining competitors more likely.

The consent agreement requires Buckeye to divest five terminals no later than 10 days after the companies consummate the deal. Notably, the consent agreement requires that Buckeye seek prior approval from the FTC for 10 years before acquiring any light petroleum products terminal within a 60-mile radius of the divested assets. The Commission unanimously approved issuing the complaint and consent agreement.

Buckeye is a major terminaling service provider for light petroleum products, which include gasoline and other fuels, in South Carolina and Alabama. Magellan similarly operates terminals in the central and southeastern United States. According to the FTC, petroleum terminals are critical to the efficient distribution of light petroleum products because they serve as intermediaries between the pipelines and water vessels that ship the products, such as gasoline, and customers at the pump.

The FTC alleges that absent divestitures of terminals in North Augusta, South Carolina; Spartanburg, South Carolina; and Montgomery, Alabama, the acquisition would significantly increase concentration and reduce competition. The FTC alleges that without the consent agreement:

• In North Augusta, the acquisition would have reduced the number of competitors in the area from three to two.
• In Spartanburg, the acquisition would result in Buckeye controlling half of the gasoline terminal capacity and the majority of light petroleum product storage capacity in the city. Buckeye and Magellan are the two largest competitors among seven firms.
• In Montgomery, the number of firms terminaling light petroleum products would drop from six to five and the number of gasoline terminaling services would drop to four.

Key Takeaways

The FTC’s unanimous decision to bring an enforcement action against this transaction offers two key insights.

First, companies considering mergers or acquisitions should expect heightened scrutiny from the FTC and the Department of Justice, especially if they operate in industries under intense political scrutiny due to high inflation and rising prices. In July 2021, President Biden issued an executive order calling on the FTC to utilize its broad mandate to combat increasing costs and perceived consolidation. A few months later, President Biden sent a letter to FTC Chair Lina Khan directing her attention to oil and gas companies specifically.

The Biden administration has not hesitated in drawing attention to industries it believes warrant more scrutiny from the FTC, and the FTC has been listening. This is the FTC’s second case in three months in the oil and gas sector. On March 25, 2022, the FTC issued a consent order requiring divestitures in a transaction involving two waxy crude oil companies. Gas prices are a highly visible reflection of inflation and rising prices generally, and the industry can expect continued scrutiny from the FTC.

Second, the prior approval provision in the consent decree is noteworthy. The FTC revitalized these provisions in 2021, but the Commission does not unanimously approve of their use. FTC Commissioners Phillips and Wilson issued a statement following the consent agreement in this transaction questioning whether prior approval would benefit competition and consumers.

In particular, they noted that a company bound by such a provision must obtain FTC approval for certain future transactions, but the FTC is not obligated to approve or reject the transaction within a specified period of time, possibly leaving the companies in a uncertain holding pattern. Commissioners Phillips and Wilson’s statement also expressed concerns that these provisions may actually have the opposite of their intended effect and increase prices.

Companies considering transactions should be aware that the FTC is increasingly looking to include these provisions in consent agreements.

By WILSON SONSINI, June 24, 2022

Expect higher food prices but little relief at the pump with Biden’s latest questionable move to combat inflation… Last Friday, Biden’s EPA Mandated the Most Ethanol Use Ever.

The EPA, after gathering comments since releasing it proposed blending requirements in December, said Friday it will require refiners to blend 20.77 billion gallons of ethanol, biodiesel, and other renewable fuel this year.

Additionally, the oil industry must blend 250 million more gallons of renewable fuel, both this year and next, after a federal court found the Obama administration inappropriately reduced the 2016 blending requirements.

The agency also denied roughly 70 exemptions for small refineries, many of which had been granted under former President Donald Trump.

Corn Growers Cheer

“The Biden EPA is to be commended for restoring sanity to the refinery exemption program,” Monte Shaw, the Iowa Renewable Fuel Association’s executive director, said in a statement. “These exemptions have never been justified and were simply being used to illegally undermine the RFS. We are grateful this long nightmare is over.”

Refiners Complain

But Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, said the blending requirement for this year is “contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.”

“Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of U.S. small refineries, both at the expense of consumers,” Thompson said.

EPA Raises Ethanol Mandate for 2022

Also on Friday, the Wall Street Journal reported EPA Trims Ethanol Fuel Mandate for 2020-21 But Raises It for 2022

The Biden administration on Friday retroactively reduced the amount of ethanol that must be blended into gasoline for 2020 and 2021 but raised the level for 2022, saying the changes are aimed at helping boost domestic fuel supplies.

The agency can adjust these requirements retroactively, signaling to refiners how much they will have to spend to buy market credits that help them comply with obligations lingering from past years.

Biden’s Ethanol Gas Price Trick

Flashback April 12, 2022: Please consider Biden’s Ethanol Gas Price Trick

In Iowa on Tuesday, Mr. Biden announced an environmental waiver to allow sales of 15% ethanol gasoline blends (E15) this summer. The Clean Air Act prohibits this because higher ethanol blends can increase smog in hot weather. They can also erode older car engines, gas pumps, storage tanks and pipelines.

In 2019 Mr. Trump directed the EPA to let E15 be sold year-round to help Midwest farmers. EPA then rewrote the Clean Air Act, claiming the text was “ambiguous.” The D.C. Circuit of Appeals disagreed and ruled that EPA had exceeded its statutory authority.

Mr. Biden says E15 can save drivers on average 10 cents a gallon, but the waiver will have a negligible impact on gas prices nationwide since so few stations sell it.

It’s also unclear what legal authority EPA intends to invoke. Under the law EPA can only issue emergency waivers to address temporary fuel-supply shortages in discrete regions or states. 

Meantime, Congress’s ethanol mandate is causing many small refiners to shut down and the U.S. to import more foreign fuel. Last week EPA denied 36 hardship exemptions for small refineries, so even more could close.

Synopsis 

•  30% higher corn prices with other crops rising by 20%, according to the National Academy of Sciences.
• Growing more corn for ethanol causes increased amounts of water pollutants from U.S. farms
• Expect more fertilizer use when fertilizer costs are soaring
• More summer smogE15 erodes older car engines, gas pumps, storage tanks and pipelines.
• Small refiners will suffer and some will go out of business allowing Elizabeth Warren to moan about the concentration of “Big Oil”. 

To top things off, when Trump tried the same thing, the courts struck it down as illegal. 

OilPrice.com by ZeroHedge, June 17, 2022

Italian Ambassador to Saudi Arabia Roberto Cantone said his country was making great efforts to diversify its gas supplies to achieve independence from Russia, by expanding its cooperation with other gas-exporting partners.

He stressed in this regard that his country was looking forward to establishing a long-term partnership with a future source of hydrogen such as the Kingdom.

In remarks to Asharq Al-Awsat, Cantone noted that cooperation in the field of energy would cover renewable energy sources and hydrogen, as the Kingdom is investing in the transition towards carbon neutrality through its Saudi Green Initiative, while Italy has extensive experience in all types of renewable energy sources.

The Italian ambassador stressed that the Saudi-Italian political dialogue was aimed at addressing relevant international issues within the framework of the G20 joint action and security challenges that affect both countries in the Mediterranean and the Middle East. In this context, he pointed to a memorandum of understanding on strategic dialogue signed last year between Saudi Foreign Minister Prince Faisal bin Farhan and his Italian counterpart Luigi Di Maio.

“Italy has always imported oil from the Kingdom at an estimated level. In general, 80 percent of Italian imports are oil and petrochemical products, while many Italian companies support Saudi Aramco’s operations at various levels,” he told Asharq Al-Awsat. He noted that Saudis were interested in Italian-made products, such as food, fashion and interior design.

Cantone added that infrastructure was another very important area of cooperation.

He said that as part of investments planned within Saudi Vision 2030, many Italian construction companies were applying to tenders launched by the government to develop the giga-projects, as well as Saudi projects in the field of sustainable mobility and connectivity.

Regarding imports from Saudi Arabia, the diplomat noted that the stock market depended on the direction of the oil sector. He said that imports declined during the pandemic, but stressed that recovery was now on the right track, with imports amounting to 4.8 billion euros in 2021, compared to 2.9 billion euros in 2020.

The level of trade exchange remained essentially unchanged despite the coronavirus pandemic, amounting to 3.1 billion euros in 2020 and 3.3 billion euros in 2021, according to Cantone, who said that last year, the total balance was in favor of the Kingdom, while it is likely to remain the same in 2022, given the current high oil price per barrel.

“Our bilateral relationship is also based on an important economic partnership, taking into account the number of Italian firms that show a tangible interest in Vision 2030 and invest in the Kingdom by opening branches or new companies,” the ambassador remarked.

By FuellCellWorks, June 17, 2022

The petroleum ministry said in a statement on Sunday.

Egypt plans to set up new area for crude oil storage in El- Tebbin, south of Cairo, the petroleum ministry said in a statement on Sunday.

The project, with an estimated cost of 1.8 billion Egyptian pounds ($96.21 million), aims to receive crude from Ain Sokhna terminal on the red sea and pump it to Upper Egypt.

ZAWYA by Ahmed Ismail, June 17, 2022

ABB, working alongside Hyundai Engineering and Técnicas Reunidas, has been employed to install their market-leading distributed control system (DCS) ABB Ability™ System 800xA at the new Olefin III complex in Plock, Poland.

Integrating ABB Ability™ System 800xA control architecture across the entire mega-development, PKN Orlen will be able to constantly monitor and analyze plant productivity, maximize asset performance, manage power consumption, ensure product quality, and optimize process efficiency in real-time.

Harnessing this continuous stream of data, the company, in line with its objective to achieve a 30 percent reduction in CO2 emissions per ton of product, will be able to make more accurate, informed decisions to drive efficient use of energy. This includes maintaining tight controls over raw material consumption, plant energy levels, and waste by-products. 

 “As part of our sustainability strategy, ABB is committed to supporting our customers in reducing their annual CO₂ emissions by more than 100 megatons by 2030. Combining our expertise in the market alongside our leading DCS technology for complex plant operations we can help PKN Orlen to maximize its return on investment,” said Brandon Spencer, President of ABB Energy Industries. 

Alongside the DCS, ABB will also deliver several systems aimed at ensuring the complex operates at optimum safety levels, including a Burner Management System (BMS), an Emergency Shutdown System (ESD), and High-Integrity Pressure Protection System (HIPPS). These will be complemented by an industrial cyber security solution focused on mitigating cyber threats towards the complex. 

Olefins from the base compound made up of hydrogen and carbon produce a mix of everyday products including cleaning, hygiene, and medical products, including the synthetic fibers used in protective clothing and masks (PPE). The global market was valued at USD 232.45 Billion in 2020, and it is expected to grow at an annual rate of 4.5 percent reaching a value of USD 329.30 Billion by 2028. This exponential growth is driven by consumer demand and increased use across the global plastics industry. 

The project is scheduled for completion in 2024 with operations due to start in 2025. To support this timeline ABB will apply its unique project methodology Adaptive Execution™. Adaptive Execution™ harnesses virtual engineering and digitalization to deliver a streamlined, standardized, and agile experience for all stakeholders. Through this methodology, ABB can lower delivery time by up to 30 percent, start-up hours by up to 40 percent, and overall automation-related capital costs by up to 40 percent.

ABB is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation, and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 105,000 talented employees in over 100 countries.

THE OGM by Tina Olivero, June 17, 2022

The oil giant is pumping billions of dollars into a plan to clean up the oil patch’s emissions profile.

ExxonMobil doesn’t believe fossil fuels will become extinct. It sees oil and gas playing a vital role in fueling the economy in the future, even as the adoption of cleaner alternatives accelerates. That’s partly due to their lower relative costs and the huge technological leaps needed before replacement fuels like green hydrogen become commercially viable.

Another reason Exxon sees a future for fossil fuels is that it can lower its carbon emissions profile through carbon capture and storage. The oil giant foresees a $4 trillion market opportunity by 2050 for cleaning up the oil patch.

What is carbon capture and storage?

Carbon capture pulls carbon dioxide emissions from fuel combustion and industrial processes out of the air so that it doesn’t get into the atmosphere and negatively impact the climate. The captured carbon dioxide then moves on pipelines or ships to underground geological formations for storage. There’s also the potential to reuse captured carbon dioxide for other purposes.  

One potentially major market for captured carbon dioxide is a process known as enhanced oil recovery (EOR). Oil companies, including Exxon, Occidental Petroleum (OXY -5.76%), Denbury Resources, and Kinder Morgan, pump carbon dioxide into legacy oil formations to increase pressure, resulting in higher production. Many of these companies currently use carbon dioxide produced from underground reservoirs for EOR. However, they’re increasingly seeking out captured carbon for EOR purposes.

In addition to EOR, potential uses of captured carbon include manufacturing other fuels like synthetic jet fuel and making building materials like concrete.

Betting big on carbon capture and storage

While carbon dioxide has a range of potential uses, the initial focus of Exxon and others in the energy sector is on sequestering it underground. The company is investing more than $15 billion over the next six years to lower greenhouse gas emissions through carbon capture and storage, hydrogen, and biofuels. It’s already the world leader in carbon capture, pulling more carbon dioxide out of the air than any other company. 

However, it has grand ambitions to build an even larger carbon capture and storage business. For example, Exxon is working on an up to $100 billion plan to capture carbon produced by petrochemical plants, power generating facilities, and other heavy industries along the Houston Ship Channel. The plan would see industrial facilities install devices to capture carbon dioxide before it leaves their plants. They could either use it to develop products or transport it via pipelines to the Gulf of Mexico, where it will get injected into sub-sea formations. 

Exxon is also looking into developing a large-scale carbon capture and storage hub in Australia. It would capture emissions produced by industries in the Gippsland Basin and transport the carbon dioxide to a depleted oilfield off the country’s coast via existing pipelines. 

Growing interest in capturing carbon

Exxon is one of many energy companies working on developing carbon capture and storage projects. EnLink Midstream (ENLC -6.96%) and Talos Energy (TALO -5.43%) are working to jointly develop a complete carbon capture, transportation, and sequestration solution for industrial-scale carbon dioxide emitters along the Mississippi River. The proposed project would use significant portions of EnLink’s pipelines in the region to transport captured carbon dioxide and move it to Talos’ River Bend sequestration site in Louisiana.

Meanwhile, EnLink and Enterprise Products Partners (EPD -5.14%) are working with a subsidiary of Occidental Petroleum on potential carbon capture and storage solutions. EnLink’s project with Occidental would focus on another section of the Mississippi River corridor, while Enterprise Products Partners is working on developing a project along the Houston Ship Channel. The midstream companies would provide existing and new pipelines to transport captured carbon to sequestration hubs operated by Occidental Petroleum. 

Carbon capture could keep the oil patch from going extinct

ExxonMobil believes carbon capture and storage is an answer to the world’s energy problem. It can make fossil fuels much cleaner while keeping the costs low compared to alternative fuels. That’s leading the oil giant to bet big on the future of carbon capture. If it’s correct, that wager could pay big dividends by enabling it to continue producing oil and gas while earning meaningful income from carbon capture and storage.

The Motley Fool by Matthew DiLallo, June 17, 2022