California Resources Corporation and Capital Power to Explore Decarbonized Power Solutions in California
Executive Summary
- California Resources Corporation’s carbon management unit, Carbon TerraVault (CTV), signed a non‑binding Memorandum of Understanding with Capital Power to evaluate and potentially provide exclusive transportation and sequestration services for up to 3 million metric tons per year of CO₂ captured at Capital Power’s 1.1 GW La Paloma natural‑gas generation facility in Kern County, California.
- The partnership aims to develop integrated CCS solutions—including data‑center siting, power infrastructure, regulatory permitting and broader integration opportunities—to support California’s decarbonization goals.
- If executed, the agreement could generate a new revenue stream for CRC/CTV and position both companies as leaders in large‑scale, low‑carbon power generation.
Key Details
- Parties Involved:
- California Resources Corporation (CRC) – NYSE: CRC
- Carbon TerraVault (CTV) – CRC’s carbon management business
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Capital Power – TSX: CPX
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Scope of Collaboration:
- Joint evaluation and development of CCS solutions for Capital Power’s La Paloma facility.
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CTV may become the exclusive provider of CO₂ transportation and sequestration services for up to 3 MMTPA (million metric tons per annum).
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Facility Profile:
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La Paloma – a 1.1 GW natural‑gas combined‑cycle generation plant located in Kern County, California.
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Potential Services & Activities:
- Feasibility studies on CO₂ capture, transport pipelines, and permanent underground storage.
- Assessment of data‑center locations, power infrastructure needs, and regulatory permitting (including EPA Class VI permits).
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Exploration of further integration opportunities between CRC’s storage assets and Capital Power’s generation portfolio.
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Strategic Rationale:
- Supports California’s broader decarbonization objectives by enabling large‑scale CCS at a major gas‑fired plant.
- Provides CTV with a prospective long‑term, high‑volume revenue contract.
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Enhances Capital Power’s ability to offer lower‑carbon electricity to its customers.
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Non‑Binding Nature:
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The MOU is non‑binding; final agreements are subject to negotiation of definitive documents, receipt of required permits, and a final investment decision by both parties.
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Quotes:
- “This MOU with Capital Power represents a promising opportunity to advance California’s decarbonization goals… we can help accelerate low‑carbon power generation across the Golden State.” – Francisco Leon, President & CEO, CRC.
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“Partnering with Carbon TerraVault highlights our commitment to practical, technology‑driven solutions that accelerate the transition to a lower‑carbon energy future.” – Avik Dey, President & CEO, Capital Power.
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Forward‑Looking Statements: The release contains forward‑looking statements regarding anticipated revenues, costs, capital expenditures and other aspects of CRC’s carbon management strategy; actual results may differ materially.