“When evaluating sequestration locations, considered reservoir quality and proximity to point source emissions and transportation as leading indicators. Notably, the report stressed the importance of midstream considerations between capture and sequestration. Global operational sequestration capacity has reached 10 million tons per year, which represents a mere 3% of planned capacity, according to a recent report by Enverus Intelligence Research (EIR). Transport Ranks with Reservoir Capacity in Rating CCUS In May, EnCap Flatrock Midstream portfolio company Humble Midstream and public midstream major Enbridge announced the joint development and marketing of a low-carbon hydrogen and ammonia production and export facility at the Enbridge Ingleside Energy Center, near Corpus Christi, Texas. “There is a need to go back and replumb to meet the new need, and that is a new opportunity.”-William R. Few of the announcements mention the pipe, connections, and compression needed to get the CO₂ from one to the other. Notably, in most of the CCUS projects proposed over the past few months, the attention has been on the capture and the sequestration. There is a need to go back and replumb to meet the new need, and that is a new opportunity.” “There are pipelines in place, but they may not be adequate to get the molecule from node to node. “That is exactly where we are with the new chapter of CO₂,” he added. a managing partner and founder of EnCap Flatrock Midstream. “In a career that is approaching four decades I’ve seen so many cycles of new opportunities driven by new technology or new markets that are dependent on getting the right types of molecules to the right places,” said William R. Now the same thinking is dawning among leading capital allocators. Even in historic basins such as the Permian, early assumptions that plenty of pipeline capacity existed were true in aggregate on paper, but not as often in the field. “It just makes more sense in terms of both environmental impact and reduced red tape as compared to large-scale, complex projects.” ‘Replumbing’ is Essential for CCUSĮarly in the shale bonanza, midstream operators spent billions of dollars in “replumbing” North America, including reversing existing lines, adding capacity, and building new pipe to connect new sources of supply. That is especially the case given how the industry has struggled to get long-haul pipelines constructed. We think the rifle-shot approach, the more localized approach, is more efficient and effective.” “We are pursuing that approach, rather than direct air capture or long-distance transportation. “The low-hanging fruit in front of the industry is where there are highly concentrated emitters with potential sequestration nearby,” said Cecere. New Frontier also signed a memorandum of understanding with Johnson Rice & Co., the oldest independent energy investment bank in the U.S., under which New Frontier will be able to make use of the bank’s energy transition and capital markets expertise, as well as its underwriting capabilities and securities trading platform.Īnother Tailwater portfolio company, Frontier Carbon Solutions in the Rockies region, is exploring exciting CCUS on several fronts. “The low-hanging fruit in front of the industry is where there are highly concentrated emitters with potential sequestration nearby.”-David Cecere, Tailwater Capital The voluntary global decarbonization market is expected to reach as much as $100 billion by 2030. The platform is expected to become broadly available in the fourth quarter of 2022. In July, New Frontier Markets opened a proprietary blockchain marketplace for voluntary carbon offset credits. We have been separating and sequestering it for years, not particularly as a business model, but just to put on-spec gas into the system.” ‘Low-hanging Fruit’ “We tell our LPs all the time that the midstream has been in CCUS for a long time,” David Cecere, a partner with Tailwater Capital, told Hart Energy. All the new technology, however, is built on long experience. Tailwater Capital is investing in both the physical and financial infrastructure to support carbon capture, utilization and sequestration (CCUS). Meritorious Awards for Engineering Innovation (MEAs)īuilding on the midstream industry’s long experience in capturing and sequestering CO₂ Tailwater Capital portfolio companies are developing carbon-credit systems and pipelines while EnCap Flatrock Midstream companies eye “replumbing” opportunities.Rextag database of energy infrastructure assets Prices for top E&P stocks and commodities. Information on assets, buyers and sellers, deal values, and more.Ī searchable database of oil and gas debt and equity offerings.
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