Occidental Petroleum (NYSE:OXY), the biggest customer to date for Squamish-based Carbon Engineering, is buying the direct-air carbon capture company for $1.5 billion (US$1.1 billion).
The American company announced Tuesday its wholly owned subsidiary, 1PointFive, has entered into an agreement to buy Carbon Engineering in a series of three payments.
The acquisition is expected to close before the end of this year, “subject to Canadian court reviews, Canadian and U.S. regulatory approvals and other customary closing conditions,” Occidental said in a release.
Occidental has been Carbon Engineering’s biggest customer, sanctioning the first large commercial scale deployments of Carbon Engineering’s direct air capture technology. Carbon Engineering developed technology that pulls CO2 from the air, to be used for other purposes, such as a chemical base for low-carbon fuel.
Once the acquisition is final, Carbon Engineering will become a wholly owned subsidiary of Occidental’s Oxy Low Carbon Ventures.
“Carbon Engineering’s personnel will continue to drive ongoing DAC [direct-air capture] technology development efforts and work closely with the Occidental and 1PointFive teams to bring DAC solutions to market,” Occidental said.
“Carbon Engineering’s research and development activities and Innovation Center will remain in Squamish, British Columbia.”
“We have always believed that global partnerships and cross-industry collaboration would be required to deploy DAC infrastructure at the scale required to make a climate-relevant impact,” said Carbon Engineering CEO Daniel Friedmann. “Carbon Engineering and Occidental have been working increasingly close together for the past five years to address the CO2 problem, making Occidental a trusted and committed partner for this next chapter in Carbon Engineering’s journey.
“At the core of this deeper relationship is the commitment to invest in the development of our technology here in Canada, and the global reach to accelerate implementation of DAC-based climate solutions in the U.S. and around the world.”
Carbon Engineering was co-founded in Alberta by David Keith and was originally backed by Canadian financier Murray Edwards, chairman of Canadian oil sands company Canadian Natural Resources Ltd. (TSX:CNQ) and Microsoft Corp. (Nasdaq:MSFT) founder Bill Gates . The company built its first pilot plant in Squamish, and later moved its headquarters to Vancouver.