US Player’s Direct Air Capture Hub Moving Toward Operations

Capture trains for Occidental's Stratos shift to commissioning ahead of 2025 startup

Occidental’s first direct air capture (DAC) hub is set to begin capturing carbon dioxide later this year, Occidental chief executive Vicki Hollub said Thursday on the company’s quarterly earnings call.

Two capture trains at the Stratos facility in Ector County, Texas are “moving over to operations” and have begun wet commissioning with water circulation, Hollub told analysts.

The facility is on track to begin operations by the end of the year, Hollub said. It is designed to capture up to 500,000 tonnes per annum of carbon dioxide.

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Occidental chief executive Vicki Hollub, right, speaks as National Ocean Industries Association (NOIA) President Erik Milito listens during the opening ceremony at the Offshore Technology Conference (OTC) on Monday, 5 May 2025 in Houston, Texas, US.Photo: OTC/PHIL MCCARTEN

Hollub’s revelation comes about one month after Congress passed the One Big Beautiful Bill Act, which, among many other measures, maintained and extended tax credits for carbon capture and sequestration, known as 45Q credits.

"This timing is perfect as there is growing momentum behind direct air capture to generate meaningful value from CO2 enhanced oil recovery, or EOR, in carbon dioxide removal credits," Hollub said.

The legislation will help Occidental in its carbon management efforts, Hollub said.

"The new law levels the playing field between carbon storage and utilization pathways like DAC to EOR," she said. "Both can and likely will play an important role across global energy supply chains and carbon management."

The Stratos facility has carbon dioxide removal (CDR) credit deals in place with JPMorgan and Palo Alto Networks. JPMorgan’s deal is for 50,000 tonnes in CDR credits, while Palo Alto Networks bought 10,000 in credits.

Other DAC venture

In addition to Stratos, Occidental is working on a joint venture with XRG, the investment arm of Abu Dhabi National Oil Company (Adnoc), to develop a DAC facility in south Texas.

XRG is considering investing upward of $500 million in the project, which will also be backed by a US Department of Energy (DoE) grant of up to $650 million.

Hollub confirmed Thursday that Occidental still intends to push the south Texas project toward a final investment decision (FID).

"The timing is not set yet, but we will FID it," Hollub said. "We're going to take advantage of some of the innovations that are being developed right now in carbon engineering to make sure that we get that in the second facility, just like we're getting it in phase two of the current facility. But we will FID."

Added Hollub: "We've got a lot of interest in others that want to be a part of that and a lot of interest in the sales. And we pre-sold the credits for Stratos, and so we'll pre-sell for that one too, but probably not sign contracts until we've done the FID."