Ozona and Marubeni Advance Texas Carbon Storage Project Toward Construction
Ozona CCS LLC (“Ozona”) has announced a final investment decision (FID) on the Pawnee Carbon Sequestration Project in Bee County, Texas, marking a significant milestone in the development of carbon capture and storage infrastructure in the state. The project is being developed through a 50-50 joint venture between Ozona and Marubeni Corp. (“Marubeni”) and is designed to capture carbon dioxide from an existing natural gas treating facility before transporting and permanently storing the gas underground.
The investment decision moves the project beyond its development phase and toward construction and future operations. Ozona will be responsible for building and operating the facilities required for carbon dioxide handling, compression, transportation and injection. The companies are targeting the commencement of carbon dioxide injection in the first quarter of 2027, subject to project execution and other relevant requirements.
The Pawnee project is intended to support the management of carbon dioxide generated at a natural gas treating facility operated by StarTex Field Services. Natural gas processing and treating operations can produce carbon dioxide that must be separated from the gas stream to meet quality specifications. Carbon capture and storage infrastructure provides a means of managing this separated carbon dioxide by directing it to suitable underground geological formations for long-term storage.
Under the planned operating model, carbon dioxide captured at the StarTex facility will be compressed and transported to the designated injection location. It will then be injected into a subsurface geological formation selected for carbon storage. The project is designed to establish an integrated system connecting an industrial emissions source with dedicated underground storage resources.
The development will use the existing O’Neal Gas Unit No. 4 well, which is being repurposed for carbon dioxide injection. Reusing an existing well provides the project with an established subsurface asset for its planned storage operations. The well and associated storage area have the potential to accommodate approximately 400,000 metric tons of carbon dioxide annually, according to Ozona.
This potential capacity represents an important component of the project’s planned carbon management capability. However, the stated figure reflects the estimated potential of the well and associated storage area rather than a guarantee of actual annual injection volumes. Realized capacity will depend on the project’s final operating configuration, commercial arrangements, regulatory requirements and other technical considerations.
A successful injection test into the Sligo Formation has provided an additional technical milestone for the development. Injection testing helps assess the suitability of a geological formation for receiving carbon dioxide and provides information relevant to the planning of future injection operations. The successful test supports the project’s progress toward its intended storage activities, although further development, construction and operational preparations remain necessary before commercial injection begins.
Ozona Chief Executive Officer Rich Adams said the Pawnee project represents a transition from development activities toward construction and eventual operations. He also highlighted the potential for the project to expand as additional sources of carbon dioxide become available for connection to the storage infrastructure.
The possibility of connecting additional carbon dioxide sources could provide opportunities to increase the project’s role in regional carbon management. If new sources are developed and suitable transportation and storage arrangements are established, the infrastructure could potentially serve a broader group of industrial customers. Any expansion, however, would depend on technical feasibility, commercial demand, regulatory approvals and the availability of additional carbon dioxide volumes.
Marubeni will lead the marketing and commercialization of carbon credits generated by the project. This responsibility will be central to the joint venture’s commercial strategy, linking the physical storage of carbon dioxide with the potential sale of associated environmental credits.
Carbon credits can provide a commercial mechanism for recognizing verified emissions reductions or carbon storage, depending on the applicable program and methodology. Their issuance and marketability generally depend on project eligibility, monitoring, reporting, verification and other relevant requirements. The precise volume and commercial value of credits from the Pawnee project will depend on its operating performance and the rules governing the applicable carbon credit market.
Marubeni’s role in marketing and commercialization is expected to support the development of a market for the project’s environmental attributes. The arrangement also establishes a division of responsibilities between the partners, with Ozona overseeing construction and operations while Marubeni focuses on carbon credit commercialization.
Beyond Pawnee, Ozona and Marubeni are evaluating additional carbon capture and storage opportunities in Texas. The evaluation of further projects indicates that the companies are considering opportunities beyond their current joint venture. Texas has industrial facilities and energy infrastructure that may provide potential sources of carbon dioxide for future capture and storage developments.
Additional projects could create opportunities to connect more emissions sources with suitable geological storage locations. However, each potential development would require individual assessment of carbon dioxide supply, geological conditions, transportation infrastructure, permitting requirements, construction costs and commercial viability. The companies have not specified the scale, location or development timetable of the other opportunities under evaluation.
The Pawnee Carbon Sequestration Project will now progress toward the next stages of development, including the construction and preparation of facilities needed to support planned injection operations. Meeting the targeted first-injection date will depend on the successful completion of project activities and the resolution of applicable regulatory, technical and commercial requirements.
The final investment decision establishes a clearer path toward implementation, but the project’s anticipated schedule, storage capacity and potential future expansion remain subject to change. Regulatory approvals, construction progress, commercial arrangements, operating conditions and other factors could affect the timing and scale of development.
Through their 50-50 partnership, Ozona and Marubeni are advancing a carbon storage project intended to connect natural gas treating operations with permanent underground storage. The planned use of the existing O’Neal Gas Unit No. 4 well, the successful injection test into the Sligo Formation and the companies’ defined commercial responsibilities represent key elements of the development.
With first injection targeted for the first quarter of 2027, the Pawnee project is positioned to move toward operational implementation while the partners continue evaluating additional carbon capture and storage opportunities in Texas.
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