Talos Secures Lease for Carbon Storage Site in the U.S. Gulf of Mexico

Offshore oil and gas operator Talos Energy announced Wednesday that it has secured a lease off the coast of Texas for a carbon storage site. 

In partnership with carbon capture and storage firm Carbonvert, Talos applied for a Texas General Land Office lease solicitation for a site off Jefferson County, in state waters. After review, the Texas School Land Board determined that Talos and Carbonvert had the only viable bid out of a field of a dozen submissions, and the board voted unanimously to assign them the lease. 

Together, Talos and Carbonvert will negotiate the final terms of a lease agreement with the Texas General Land Office, subject to approval from the board.  Talos will be the operator of this project.

 The site covers about 40,000 acres, and Talos already owns seismic data for all of it. The location is near to a large cluster of carbon emitters (like refineries and petchem plants) along the Texas and Louisiana coastlines. Based on Talos's initial study of the geology of the site, the firm expects it can store about 225-275 million tonnes of carbon dioxide from industrial sources in the area.

"This is the first of several steps in our strategy to build multiple carbon capture and storage sites along the United States Gulf Coast where we can use Talos's core competencies to operate these important projects," said Talos CEO Tim Duncan in a statement. "We want to redefine the role of traditional oil and gas companies, as we recognize the need to responsibly develop and produce hydrocarbons as well as lowering overall emissions in the communities where we work and live."

Talos, formed in 2012 with backing from two private equity firms, has historically specialized in acquiring and expanding on the production assets of larger oil companies. In recent years it has branched out into its own independent E&P operations, including a hotly-disputed find in Mexican waters of the Gulf. 

Earlier this month, Talos announced a new exclusive JV partnership with a different CCS firm - Storegga Geotechnologies - to focus on U.S. carbon capture opportunities in the Gulf of Mexico, including state and federal waters off Texas. Storegga is the lead developer of the Acorn Carbon Capture and Storage and Acorn Hydrogen Projects in the United Kingdom. According to Talos, the bid it submitted with Carbonvert predates its agreement with Storrega.