Enlink sees more carbon-removal projects after Exxon deal

Enlink Midstream LLC expects to sign additional agreements to transport captured carbon dioxide into 2023 after striking a deal with Exxon Mobil Corp. last week.

The Texas-based pipeline operator aims to take advantage of underused conduits it owns along the Mississippi River, a hub of heavy industry and greenhouse-gas emissions, as a competitive edge, according to chief executive officer Jesse Arenivas. Carbon capture and sequestration may double profits from EnLink’s Louisiana segment over the next five years, he said. 

“We are exercising our ability to be the first mover and be the transporter of choice for carbon in Louisiana,” Arenivas said during an interview. He took over as CEO in June after working for almost two decades at larger rival Kinder Morgan Inc. including as president of CO2 operations. “This is a new growth engine for Enlink,” he added. 

CCS has emerged as an increasingly promising alternative for U.S. pipeline companies as they look at ways to make their vast network of fossil-fuel conduits relevant in a low-carbon economy. Incentives include hefty tax credits under President Joe Biden’s clean energy bill. 

Under the terms of last week’s agreement, Enlink annually will move 2 million metric tons of carbon captured by ammonia maker CF Industries Holdings Inc. to an Exxon storage site starting in 2025. The project will have the impact equivalent to replacing 700,000 gasoline-powered cars with electric vehicles and is the largest of its kind so far, the companies said. Enlink has also discussions for similar arrangements with companies including Occidental Petroleum Corp. and ConocoPhillips. 

There’s potential for projects to capture as much as 30 million metric tons of carbon along the Mississippi River corridor based on cost estimates, Arenivas said. 

© 2022 Bloomberg L.P.

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