Exxon Mobil Corporation restarted work on a planned one million-ton-a-year carbon capture project in Wyoming and said operations could begin as soon as 2025, two years later than the previously proposed timeline.
The LaBarge expansion will cost about $400 million, the company said Thursday in a statement. Exxon will begin requesting bids for engineering, procurement and construction, with a view to taking a final investment decision in 2022.
The announcement from Exxon comes as the company feels pressure from investors to overhaul its climate strategy. While competitors BP plc and Royal Dutch Shell plc have set long-term goals to achieve net zero carbon emissions and invested in renewable energy, Exxon has focused on shorter term goals to reduce methane and invest in low-carbon technologies.
The LaBarge project would be the latest in a series of expansions at the site. It has long produced natural gas and helium, but large quantities of carbon dioxide are also extracted as a byproduct. Exxon currently captures as much as seven million tons a year of CO2 at the location, making it one of the biggest carbon capture facilities in the world. Much of that is sold to energy companies operating nearby for enhanced oil recovery, a technique where the CO2 is injected into oil and gas wells to improve production.
Exxon had previously planned to start construction in the summer of 2020 but backtracked due to Covid-19, which hit the company hard as tumbling oil prices forced it to delay spending while taking on more debt in order to maintain its $15 billion-a-year dividend. Improved commodities prices this year and Exxon’s stronger financial position are helping to revive the expansion’s prospects.
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