Minnkota and Reliant Split Risk on Project Tundra CCS

Project Tundra is moving again, and a new ownership split may be the reason it finally reaches a final investment decision. Minnkota Power Cooperative has partnered with Reliant Carbon Capture & Storage under a structure that separates who captures the CO2 from who stores it. That division of risk and reward could be a template for stalled CCS projects at other industrial sites across North America.

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What Stalled Project Tundra in the First Place?

Project Tundra has been in development for years at Minnkota's Milton R. Young Station, a coal-fired power plant in Oliver County, North Dakota. Earlier partnership structures placed most of the capital and execution risk on Minnkota itself.

A prior partnership with TC Energy collapsed when TC Energy withdrew. That exit left the project without a commercialization partner and renewed uncertainty about its path forward.

The original build plan called for a five-year construction timeline. Extended schedules inflate costs and make it harder to model bankable returns.

Under the Trump administration's 2025 grant cancellations, DOE funding awarded under the Bipartisan Infrastructure Law was largely eliminated. That removed what had been a key financial pillar for the project.

With federal grants gone, the economics shifted entirely toward the Section 45Q tax credit. The credit offers $85 per metric ton for CO2 permanently stored underground or used in enhanced oil recovery. It is now the primary engine for Project Tundra's revised business case.

How Does the New Ownership Split Actually Work?

The new structure separates two distinct functions. Minnkota retains ownership of the coal plant and the underground CO2 storage site. Reliant Carbon Capture & Storage comes in to finance, build, and operate the carbon capture facility itself.

Reliant's capture facility carries a price tag of $1.67 billion. Minnkota's portion, covering the sequestration wells and storage infrastructure, runs to approximately $90 million.

Under the arrangement, Reliant claims the 45Q credits for every tonne stored. Minnkota earns compensation for supplying the CO2 stream and for providing access to the underground storage site.

This approach mirrors a model gaining traction across the CCS sector. A specialist company owns the capture infrastructure while the underlying emitter retains the storage asset.

Lapis Carbon Solutions applied a similar model at LSB Industries' Arkansas ammonia facility. Lapis covered 100 percent of capital costs for capture, pipeline, and injection well infrastructure.

At 5 million tonnes per year, the 45Q credit generates up to $425 million annually for Reliant at full operation. That revenue stream justifies the $1.67 billion capital investment. It also provides the returns needed to attract project financing.

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What Does Minnkota's Storage Asset Actually Represent?

Minnkota holds the largest fully permitted CO2 storage facility in the United States. Permitted storage capacity is one of the scarcest assets in CCS development right now. Obtaining a Class VI injection well permit through the EPA takes 24 months or longer under federal review, according to federal CCS permitting analysis.

Minnkota's existing permit sidesteps that bottleneck entirely. If Bakken EOR demand doesn't materialize right away, the permitted storage site near the plant serves as the fallback. Both routes qualify for the $85 per tonne 45Q credit.

How Does This Model Cut Construction Time by 60 Percent?

The shorter timeline comes from bringing in a specialist operator who deploys proven methods and equipment. Reliant isn't building a custom system from scratch. It is applying technologies already deployed across the energy industry.

Longer construction timelines raise costs in two ways. They extend the period during which capital is deployed without generating revenue, and they expose projects to cost inflation across materials, labor, and financing. Compressing that timeline directly improves project economics and reduces the risk that the project stalls again before FID.

The global CCS industry has been moving toward specialist operators as a way to accelerate deployment. Projects at more mature stages now make up 60 percent of the pipeline, per the IEA CCUS Projects Database.

That reflects a clear preference for execution over planning. Project Tundra's revised structure fits squarely within that trend.

Structure Element	Prior Model	New Model
Capture facility ownership	Minnkota (primary risk bearer)	Reliant CCS (specialist operator)
Storage asset ownership	Minnkota	Minnkota (retained)
45Q credit recipient	TC Energy (withdrawn)	Reliant CCS
Construction timeline	~5 years	~2 years
State loan recommended	Not approved under prior structure	$205M (pending final approval)
FID target	Stalled indefinitely	Mid-2027

What Role Does the Bakken Play, and Why Does It Matter?

The CO2 captured at the Milton R. Young Station could flow to the Bakken oil fields for enhanced oil recovery, or EOR. In CO2-EOR, captured carbon is injected into mature oil reservoirs to extract additional crude.

The process permanently stores CO2 underground. It also qualifies for the same $85 per tonne 45Q credit as dedicated geological storage.

State officials are watching this closely. North Dakota has significant Bakken production, and the oil sector is actively exploring CO2 sourcing for EOR applications.

The EOR angle gives Project Tundra a potential revenue pathway beyond the tax credit itself. If oil field operators pay a market rate for CO2 delivery, Minnkota's compensation could increase. That would add upside beyond the baseline 45Q arrangement.

Can Other Stalled CCS Projects Replicate This Structure?

The split-ownership model has real transferability potential. Many industrial emitters trying to develop CCS are asked to simultaneously manage operations, finance capture infrastructure, navigate permitting, and claim complex tax credits. That is a lot of distinct expertise to hold in one organization.

Separating those functions distributes risk more efficiently. The emitter retains the storage asset. The specialist owns the capture equipment and claims the 45Q revenue.

The emitter doesn't need to become a CCS company. The specialist brings existing technology, proven construction methods, and a tax credit-based financing structure. Both parties have a clear and distinct role.

The U.S. has over 270 publicly announced carbon capture projects representing $77.5 billion in capital investment. Many of those projects face the same friction that slowed Project Tundra: a single organization bearing too much risk across too many functions. The Minnkota-Reliant model offers a way to break that bottleneck.

The Section 45Q credit has proven durable across multiple policy shifts. It survived the One Big Beautiful Bill Act in July 2025 largely intact, maintaining $85 per metric ton for point-source capture with geological storage. That policy stability makes the credit bankable, which is what specialist operators like Reliant need to attract project financing.

What Still Needs to Happen Before Construction Starts?

The North Dakota Clean Sustainable Energy Authority voted on August 19, 2026 to recommend $205 million in state loans for the partnership. That recommendation is not the final word. The state Industrial Commission must still provide final approval before those funds are committed.

A final investment decision is expected in mid-2027. Construction would follow that FID. The roughly two-year build timeline puts potential commissioning in the 2029 range.

The project would reduce carbon emissions at the Milton R. Young Station by 95 percent. It would create approximately 350 jobs and, according to company officials, would not increase utility bills for Minnkota members.

The authority had originally set aside $250 million in loans for Project Tundra under its prior application. It was waiting for a revised structure that could demonstrate economic viability. The Minnkota-Reliant partnership satisfied that condition well enough to earn a positive recommendation.

A Finance Model Worth Watching

Project Tundra's new structure isn't just a project update. It's a financing model that solves a problem the CCS industry has been wrestling with for years. When one organization owns everything from the smokestack to the storage well, risk concentration can kill even a technically viable project.

The Minnkota-Reliant split shows that the emitter can stay in its lane. The utility operates the power plant and holds the storage asset. A specialist takes on the capture function and the associated credit risk.

That division opens the door for other utilities and industrial emitters sitting on stalled projects. The global CCS pipeline is growing, and models like this one are part of how it gets built.

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