Denbury CO2 -- New Agreement -- "Blue" Hydrogen -- October 29, 2022

I don't know if folks are paying attention but oil companies are used to planning twenty and thirty years into the future.

The best example, without question, the Keystone XL pipeline. Oil companies saw what was coming and knew the western Canadian heavy oil was critical for "affordable" oil. The EU, Saudi saw this coming and using "green" as their cover was able to shut the Keystone XL down.

Be that as it may.

The oil companies now see CO2-enabled fracking as the next big thing to maximize oil production from shale. That will be the fourth shale revolution. Peter Zeihan discussed the first three shale revolutions in his 2017 book.

Be that as it may.

But CO2 will be used for more than EOR fracking.

Denbury has just signed a 20-year agreement to provide CO2 transportation and storage services to Lake Charles Methanol in association with LCM's planned "blue" methanol project.

From the press release:

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.

It's my feeling that Denbury is the world-class leader when it comes to "all-things CO2." 

By the way, the purpose for "blue" hydrogen in Louisiana? See below. 

XOM has taken notice.

That may be why XOM was so cautious with regard to its recent dividend hike. 

For more on "blue hydrogen," for starters:

• North Dakota, here it comes;
• hydrogen;
• Saudi Arabia;
• RBN Energy;