Denbury Executes Definitive Agreement with Lake Charles Methanol for CO2 Transportation and Storage Services
October 27 2022 - 4:15PM
Business Wire
Denbury Inc. (NYSE: DEN) (“Denbury” or the “Company”) today
announced that its subsidiary, Denbury Carbon Solutions, LLC., has
executed a 20-year definitive agreement to provide CO2
transportation and storage services to Lake Charles Methanol
(“LCM”) in association with LCM’s planned “blue” methanol
project.
LCM’s world class facility will be located along the Calcasieu
River near Lake Charles, Louisiana, approximately 10 miles from
Denbury’s Green Pipeline. The facility is designed to utilize
Topsoe’s SynCORTM technology to convert natural gas into hydrogen
which will be synthesized into methanol, while incorporating
permanent carbon capture and sequestration. The process is
anticipated to deliver over 500 million kilograms of hydrogen per
year as a feedstock to produce 3.6 million metric tons per year
(“mmtpa”) of “blue” methanol, while capturing approximately 1 mmtpa
of CO2. This is a CO2 equivalent to removing the emissions of
200,000 cars from the road each year.
LCM is finalizing its major permits to begin construction, and
securing services for LCM’s carbon transportation and sequestration
is a major milestone. The project is expected to reach a Final
Investment Decision in 2023 with first production anticipated in
2027.
The CO2 to be captured by LCM will be transported by Denbury to
the Green Pipeline and then to one of multiple planned
sequestration sites along Denbury’s expansive Gulf Coast CO2
pipeline network. In association with the project, Denbury intends
to construct a pipeline connection from the Lake Charles industrial
area to its Green Pipeline. The Company anticipates that the new
pipeline will facilitate the transportation and storage of
significant additional CO2 emissions from the Lake Charles
industrial area, which are currently estimated at 20 mmtpa.
Nik Wood, Senior VP and head of Denbury Carbon Solutions,
commented, “We’re excited to reach this significant agreement with
LCM on its innovative Blue Methanol project. In addition to serving
LCM’s CO2 transportation and storage plans, our pipeline network
expansion into the Lake Charles area will position Denbury to help
other industrial customers in the area decarbonize their
businesses. We look forward to working with LCM on this exciting
low-carbon project, reducing CO2 emissions and creating value for
Denbury shareholders.”
Don Maley, Chief Executive Officer of Lake Charles Methanol,
said, “Our partnership in carbon sequestration with Denbury will
help LCM achieve industry leading low-carbon intensity clean
hydrogen and blue methanol, completing a transformation of the LCM
project into one of the leading U.S. industrial projects
decarbonizing production of methanol at scale. Denbury’s world
class carbon sequestration infrastructure pairs well with LCM’s
best in class use of innovative technology to achieve clean
hydrogen production as defined by the Inflation Reduction Act and
the Bipartisan Infrastructure Framework. We are excited to be part
of this new clean hydrogen fuels future along with our long-term
methanol offtake customers and all of the other stakeholders in
Lake Charles and Louisiana.”
ABOUT DENBURY
Denbury is an independent energy company with operations and
assets focused on Carbon Capture, Use and Storage (CCUS) and
Enhanced Oil Recovery (EOR) in the Gulf Coast and Rocky Mountain
regions. For over two decades, the Company has maintained a unique
strategic focus on utilizing CO2 in its EOR operations and since
2012 has also been active in CCUS through the injection of captured
industrial-sourced CO2. The Company currently injects over four
million tons of captured industrial-sourced CO2 annually, with an
objective to fully offset its Scope 1, 2, and 3 CO2 emissions by
2030, primarily through increasing the amount of captured
industrial-sourced CO2 used in its operations. For more information
about Denbury, visit www.denbury.com.
The Denbury Carbon Solutions team was formed in January 2020 to
advance Denbury’s leadership in the anticipated high-growth CCUS
industry, leveraging Denbury’s unique capabilities and assets that
were developed over the last 20-plus years through its focus on CO2
EOR.
Follow Denbury on Twitter and LinkedIn.
ABOUT LAKE CHARLES METHANOL
Lake Charles Methanol, LLC (LCM) is a Clean Hydrogen project
located in Lake Charles, LA that will use advanced natural gas
reforming technology and permanent carbon capture and sequestration
to produce low-carbon intensity hydrogen for conversion to Blue
Methanol. Construction of the project is expected to start in the
second half of 2023. The project is estimated at a $4 billion
capital investment with construction contracts to be sourced out of
the Greater Lake Charles area, along with 200 permanent jobs when
operational. Approximately 30% of all materials will be purchased
in the local economy with substantial employment during the
construction period with up to 750 workers onsite per day during
peak construction periods. For more information about Lake Charles
Methanol, please visit www.lakecharlesmethanol.com.
This press release contains forward-looking statements that
involve risks and uncertainties, including the contingencies
related to the plant being financed and built, and the timing
thereof, the accuracy of estimated quantities of CO2 offtake, and
obtaining Class VI permits required for permanent CO2
sequestration. These statements are based on engineering,
geological, financial and operating assumptions that Denbury
believes are reasonable based on currently available information;
however, their achievement are subject to a wide range of business
risks, and there is no assurance that these goals and projections
can or will be met. Actual results may vary materially. In
addition, any forward-looking statements represent Denbury’s
estimates only as of today and should not be relied upon as
representing its estimates as of any future date. Denbury assumes
no obligation to update these forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20221027005932/en/
Brad Whitmarsh, 972.673.2020, brad.whitmarsh@denbury.com Beth
Bierhaus, 972.673.2554, beth.bierhaus@denbury.com
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