Denbury May Expand CO2 System Capacity 300%

Denbury Inc. (NYSE: DEN), which operates more than 1,000 miles (1,609 kilometers) of carbon dioxide (CO₂) pipelines in the U.S. Gulf Coast and Rocky Mountain regions to support enhanced oil recovery (EOR) operations, reported Monday that it is exploring a “significant expansion” in its system infrastructure capacity.

“Denbury is uniquely positioned to leverage its experience and existing CO₂ infrastructure to lead in the evolving CCUS (carbon capture, use and storage) industry, deliver value to our stakeholders, and facilitate a meaningful reduction in CO₂ emissions,” Denbury Senior Vice President Nikulas Wood remarked in written statement emailed to Rigzone.

Recently named head of Denbury’s Carbon Solutions team, Wood pointed out the company is holding talks with various potential customers to transport and store their captured CO₂ emissions.

“We are immediately able to utilize additional captured CO₂ in our existing EOR fields, and the team is also working to secure additional non-EOR CO₂ storage locations,” Wood said. “We expect the numerous discussions underway will lead to the execution of initial agreements later this year.”

Denbury note that it has identified the following strategic priorities for its Carbon Solutions unit to accelerate expansion in CCUS:

• Generate new cash flow streams by making deals with existing and newbuild industrial emitters to transport and store captured CO₂.
• Increase permanent CO₂ storage capacity by developing a geographically diverse portfolio of subsurface storage sites.
• Increase Denbury’s proportion of low-carbon-intensity blue oil production by seeking to use captured industrial-sourced CO₂ in EOR operations rather than naturally sourced CO₂.
• Evaluate and prepare for expanding the company’s infrastructure capacity by up to 200% to 300%.
• Seek strategic partnerships across the CCUS value chain.

“I am confident that Denbury Carbon Solutions will be a highly successful and significant growth engine for our company under Nik’s leadership,” commented Denbury CEO Chris Kendall.

Denbury has been a player in CCUS, injecting industrial-sourced CO₂, since 2013.

To contact the author, email mveazey@rigzone.com.