ExxonMobil, Calpine strike CO2 storage deal for Texas plant

SPRING, Texas - Exxon Mobil Corporation (NYSE: XOM), a $464 billion energy giant with a robust financial health score of "GOOD" according to InvestingPro, has entered into an agreement with Calpine Corporation, a major player in natural gas electricity generation, to transport and store carbon dioxide (CO2) emissions from Calpine’s Baytown Energy Center in Texas. The initiative is part of a larger Carbon Capture and Storage (CCS) project aimed at reducing carbon emissions from power generation.

Under the agreement, ExxonMobil will handle up to 2 million metric tons of CO2 annually from the Calpine facility. This move expands ExxonMobil’s CCS customer base to six, with total CO2 under contract now approximately 16 million metric tons per year. The CO2 will be integrated into ExxonMobil’s extensive pipeline network, which is utilized for both enhanced oil recovery and permanent CO2 sequestration.

Barry Engle, President of ExxonMobil Low Carbon Solutions, expressed excitement about the collaboration, emphasizing its contribution to American energy security and the competitive advantage it provides by leveraging the country’s natural gas resources.

The Baytown CCS Project is expected to generate around 500 megawatts of low-carbon electricity, sufficient to power over half a million homes. Additionally, it will supply steam for industrial purposes. Project development activities, including engineering and permitting, are in progress, and the project is anticipated to create a significant number of construction and permanent jobs.

Caleb Stephenson, Executive Vice President at Calpine, highlighted the importance of the partnership with ExxonMobil in advancing CCS technology. He pointed out that natural gas-fired power plants will continue to be a crucial part of the energy grid for the foreseeable future. The project’s progression depends on supportive government policy, power sales agreements with customers, and the acquisition of necessary regulatory permits.

Both companies have expressed gratitude for the support from the Trump administration and the Department of Energy in fostering energy production and CCS technology development. The advancement of CCS technology is seen as pivotal for the commercialization of low-carbon power generation.

ExxonMobil is a leading energy and petrochemical company with a focus on producing products that support modern life and lower emissions technologies. Calpine stands as America’s largest generator of electricity from natural gas and geothermal resources.

The information reported is based on a press release statement.

In other recent news, ExxonMobil’s financial outlook has been under scrutiny, with UBS adjusting its price target for the company to $131 from $135, while maintaining a Buy rating. This revision follows a detailed analysis of ExxonMobil’s earnings, with a particular focus on the first-quarter 2025 earnings per share estimate, which was adjusted to $1.72, down from $1.75. Additionally, TD Cowen also revised its price target for ExxonMobil to $120 from $125, citing anticipated lower chemical earnings in 2025 and 2026, though the firm continues to endorse the stock with a Buy rating. Despite these adjustments, both UBS and TD Cowen remain optimistic about ExxonMobil’s long-term prospects, noting the company’s robust balance sheet and potential for sustained share buybacks.

Moreover, the U.S. Federal Trade Commission (FTC) is seeking public input on a petition by Scott Sheffield, former CEO of Pioneer Natural Resources, challenging an FTC order related to Exxon’s acquisition of Pioneer. This order currently restricts Sheffield from joining Exxon’s board or serving in an advisory capacity. In a broader context, the Energy Department’s proposed cuts could impact ExxonMobil’s clean-energy collaborations, including projects involving hydrogen and carbon capture. While no final decisions have been made, these cuts could affect significant federal funding for clean-energy initiatives, potentially disrupting contracts with ExxonMobil and other energy firms.

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