Occidental and its subsidiary 1PointFive have announced the signing of a Strategic DAC Framework Agreement with XRG, the investment arm of ADNOC, to evaluate the formation of a joint venture aimed at developing a large-scale Direct Air Capture facility in South Texas. Under the agreement, XRG will consider investing up to $500 million to support the development of a DAC facility with a designed capacity to capture 500,000 tons of carbon dioxide annually.
The agreement was formalised by Occidental president and CEO Vicki Hollub and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber during U.S. President Donald J. Trump’s state visit to the United Arab Emirates. This collaboration represents the latest milestone in Occidental’s broader DAC strategy, which includes the development of STRATOS—its first DAC facility in West Texas—set to begin commercial operations in 2025.
The South Texas DAC Hub, located on King Ranch in Kleberg County, is strategically positioned near key industrial infrastructure along the U.S. Gulf Coast. It spans approximately 165 square miles and has the potential to store up to 3 billion tonnes of CO₂ in geologic formations. The facility currently under front-end engineering and design is expected to capture 500,000 tons of CO₂ annually. The project recently received an award of up to $650 million from the U.S. Department of Energy, further validating the growing confidence in DAC technology.
“We are proud to advance our decades-long partnership with ADNOC and XRG on our South Texas DAC Hub, which we believe will deliver game-changing technology to support U.S. energy independence and global goals,” said Vicki Hollub. “Agreements like this, along with U.S. DOE support, demonstrate continued confidence in DAC as an investable technology that can create jobs and economic value in the United States and Texas.”
Khaled Salmeen, chief operating officer at XRG, commented: “Our longstanding partnership with Occidental continues to drive scalable, high-growth and strategically attractive projects that create long-term sustainable value. The U.S. is a priority market for XRG and we look forward to building on this partnership as we continue to invest in strategic projects across the energy value chain.”
Occidental and ADNOC have been exploring joint opportunities in carbon capture, utilisation, and storage since signing a memorandum of understanding in 2023. The proposed DAC facility in South Texas represents the latest evolution of that cooperation and is poised to become a cornerstone in global efforts to scale carbon removal technologies.
The venture underscores Occidental’s continued leadership in carbon management and XRG’s commitment to transformational investments in natural gas, chemicals, and low-carbon energy solutions. The collaboration builds on their existing partnership in projects such as Al Hosn Gas and onshore oil and gas developments in the UAE.
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