Oxy’s Stratos Direct Air Capture Project Nears Finish Line

The first phase of Stratos, Occidental Petroleum’s (Oxy) massive direct air capture (DAC) project, is nearly complete as it moves closer to the start of operations later this year, company executives said.

“We believe DAC will deliver long-term value as well as help achieve U.S. energy security by developing the carbon neutral fuels the world needs,” Oxy CEO Vicki Hollub said Feb. 19 on the company’s earnings call.  “We have the flexibility to use DAC CO₂ for both EOR and sequestration.”

The commercial-scale facility, positioned on about a 65-acre site in Texas’ Ector County, is designed to capture up to 500,000 metric tons of CO₂ annually. The facility is being developed by Oxy’s 1PointFive with Carbon Engineering’s DAC technology.

“Stratos is progressing on schedule to be commercially operational this year. We completed construction of Trains 1 and 2 in December and have been thoroughly impressed by the work of our teams and our construction partner Worley,” Hollub added. “Construction on the central processing facilities is expected to be completed in the second quarter with commissioning on Trains 1 and 2 in parallel. We expect startup operations to continue in the third quarter over the ramp up of the initial capacity through year end.”

DAC is considered a key technology to help lower greenhouse gas emissions. The process involves using large fans that essentially suck air into a system containing chemical solutions that absorb the CO₂. The CO₂ is then compressed and transported for use or permanent sequestration deep underground.

Big day nears

Stratos is expected to be the world’s largest DAC facility when it begins operating.

“We’re all really excited here. Stratos Phase 1 is at 94% complete overall and 98% complete on construction. Blast piping spools are being hydrotested; instrumentation and electrical equipment checks are ongoing,” said Ken Dillon, senior vice president and president of international oil and gas operations for Oxy. “Worley has done incredibly well on the project. Once we’ve got the mechanical completion for the process area and the calciner, we’re then moving into the startup phase.”

Carbon Engineering’s direct air capture process shows how major unit components—air contactor, pellet reactor, slaker and calciner—capture, purify and compress atmospheric CO₂. (Source: Carbon Engineering)

As part of the process, OxyChem teams will pump water around the system and start running the fans, he explained. Next steps involve injecting water into one bay and mixing potassium hydroxide and lime before making pellets, which separate calcium carbonate from a solution to release the CO₂ gas. “Once we start making the pellets, we filter those pellets, we dry them, and then we start moving them through the mechanical handling systems to the calciner, start up the calciner and then start capturing CO₂, which is a really big day at site. It will be very small volumes.”

Stratos will have an initial capacity of 250 ktpa as it ramps up throughout 2025. Startup operations for the remaining 250 ktpa of capacity is expected to begin in mid-2026.

“Once we’ve got one bay moving, then we start other bays and then we start compression and start injection,” Dillon said.

Richard Jackson, president of U.S. onshore resources and carbon management operations for Oxy, added the company has been conservative this year regarding startup, timing and the ramp-up to full capacity as it continues to learn throughout commissioning and startup.

“Like we do all the projects, we’re looking for opportunities to reduce operating expense. We’re looking for opportunities to increase capacity,” Jackson said. “We want to be really thoughtful over the next six months to try to learn as much as we can” to maximize positive outcomes.

The technology is newer compared to other forms of carbon capture and weighs in on the higher end when it comes to cost. However, companies pursuing DAC projects like Oxy are securing carbon removal (CDR) credits. The credit, which represents 1 metric ton of CO₂ that has been removed from the atmosphere, can be purchased by other companies to offset their emissions.

“CDRs are important to help us prove out the technology and get the costs down. To advance those objectives, we signed several foundational CDR agreements last year,” Hollub said. “We accelerated the pace of DAC R&D through the integration of our Carbon Engineering and Oxy teams, which has resulted in an open exchange of ideas that has expanded our culture of innovation.”

Carbon Engineering’s innovation led to improved designs that include fewer air contactors and pellet reactors to reduce operating expenses and increase reliability, a spokesman for Oxy told Hart Energy in a statement. “We phased STRATOS construction to incorporate this innovation and will bring these learnings to the development of facilities at the South Texas DAC Hub.”

Spending plans

Oxy also delivered a brief update on its direct lithium extraction (DLE) project with joint venture partner BHE Renewables, a subsidiary of Berkshire Hathaway Energy. Hollub said they are “progressing from a pilot to demonstration plant to explore the commerciality of our subsidiary TerraLithium’s patented DLE technology.”

TerraLithium utilizes a sorbent to extract lithium chloride from brine as part of its DLE process.

Oxy said it plans to spend about $400 million on Low Carbon Ventures in 2025, down from about $500 million in 2024. Most of that will go toward the continued buildout of Stratos and the rest to Oxy’s South Texas DAC hub and Gulf Coast sequestration projects.

The company expects its low-carbon program’s net capital to be about $600 million annually through 2026.

In all, Oxy’s capital budget for the year is between $7.4 billion and $7.6 billion with the bulk dedicated to oil and gas.

“We built our 2025 capital plan to focus on projects that we believe best positioned Oxy for long-term success. As in past years, we retain a high degree of flexibility with more than 75% of our oil and gas capital allocated to our U.S. onshore portfolio,” Hollub said. “This allows us to adapt to commodity price fluctuations and efficiently respond to market conditions. In addition, our focus on short cycle, high return unconventional development will help to facilitate our near-term debt reduction, supporting our cash flow priorities and commitment to enhanced shareholder returns.”

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