Occidental Petroleum, an oil and gas producer, has entered a definitive purchase agreement to acquire Carbon Engineering, a Canadian direct air capture (DAC) and air-to-fuel (ATF) startup, for USD 1.1 billion in cash. The deal is expected to close before the end of 2023.

Through the acquisition, Occidental will be able to deploy Carbon Engineering’s DAC technology across its DAC plants globally. Meanwhile, Occidental has been working with Carbon Engineering since 2019. In addition, this acquisition allows Occidental’s subsidiary, 1PointFive, to scale up its DAC deployments.

Upon completion of the acquisition, Carbon Engineering will become a wholly-owned subsidiary of Oxy Low Carbon Ventures. Nevertheless, Carbon Engineering’s R&D activities and its innovation center will remain in Squamish, British Columbia.

Analyst QuickTake: Occidental unveiled the deployment of Stratos , the world’s largest DAC plant through its subsidiary, 1PointFive, in May 2023. The facility will utilize Carbon Engineering’s proprietary DAC technology. The plant is expected to initially capture 500,000 tons of CO2 per annum with plans to capture one million tons of CO2 per annum once fully operational. The facility plans to commercialize operations in mid-2025 in Ector County, Texas. Occidental and Carbon Engineering will also adopt Stratos’s front-end engineering and design study for a second DAC plant in Kleberg County in South Texas.