Valero, Blackrock partner with Navigator on CCS project

Valero Energy Corp. and BlackRock Global Energy & Power Infrastructure Fund III announced on March 16 that they are partnering with Navigator Energy Services to develop an industrial scale carbon capture pipeline system (CCS). The initial phase is expected to span more than 1,200 miles of new carbon dioxide gathering and transportation pipelines across five Midwest states with the capability of permanently storing up to 5 million metric tons of carbon dioxide per year. Pending third party customer feedback, the system could be expanded to transport and sequester up to 8 million metric tons of carbon dioxide per year. Valero, the largest renewable fuels producer in North America, is expected to become an anchor shipper by securing a majority of the initial available system capacity. Navigator is expected to lead the construction and operations of the system and anticipates operations to begin late 2024. In the coming months, Navigator will seek additional commitments to utilize the remaining capacity via a binding open season process.

The CCS project seeks to provide biorefineries and other industrial participants a long-term, economic path to materially reduce their carbon footprint while maximizing the value of their end-product in a cost-effective manner that is safe for the environment.

“This project demonstrates our leadership in energy transition through innovation in renewables,” said Joe Gorder, Valero chairman and CEO. “We continue to expand our long-term competitive advantage with investments to produce lower carbon fuels.”

“We are very excited to partner with Valero and Navigator in the development of this project,” said Mark Florian, head of BlackRock’s Global Energy & Power Infrastructure team, which invests in essential, long-term infrastructure investments in the energy and power sector and sits within BlackRock Real Assets. “Carbon capture infrastructure is a key part of reducing global carbon dioxide emissions, and we look forward to executing this important project with high-quality industry partners and creating a strong investment for our funds.”

“Now is the time for industry-leading market participants to join forces to complete an environmentally focused midstream project of this size and scale. Harnessing our collective resources and strengths will create a unique infrastructure project that changes the way carbon emissions are managed,” said Matt Vining, Navigator’s CEO.

Proposed System Details

Navigator will work with each counterparty to install or connect the applicable carbon capture equipment to the pipeline at various receipt points in Nebraska, Iowa, South Dakota, Minnesota, and Illinois. The proposed system plans to transport liquefied carbon dioxide through the pipeline, ranging from 6” to 16” in diameter, for delivery into a central sequestration facility contemplated to be in south-central Illinois. The system is expected to have the ability to expand materially if driven by demand.

Open Season

Prior to participating in the non-binding open season, interested parties must execute a confidentiality agreement to govern the receipt of the open season documentation. All potential shippers must submit non-binding information by 12:00 p.m. Central Time on April 30, 2021 as an expression of interest to continue in the binding process. The Notice of Open Season is available on the project’s website at www.navigatorco2.com. More information about the open season is also available by contacting Navigator’s Chief Commercial Officer, Laura McGlothlin, at (214) 880-6003 or [email protected].