International fuel and petrochemicals company Valero and BlackRock Real Assets’ BlackRock Global Energy & Power Infrastructure Fund III announced today a new partnership with midstream services company Navigator Energy Services to develop an industrial scale carbon capture pipeline system (CCS).

According to the companies, the project is expected to span more than 1,200 miles of new carbon dioxide gathering and transportation pipelines across Nebraska, Iowa, South Dakota, Minnesota, and Illinois, with the capability of permanently storing up to 5 million metric tonnes of carbon dioxide per year in its first phase, with the potential to be expanded to transport and sequester up to 8 million metric tonnes of carbon dioxide per year.

Mark Florian, Head of BlackRock’s Global Energy & Power Infrastructure team, said:

“We are very excited to partner with Valero and Navigator in the development of this project. Carbon capture infrastructure is a key part of reducing global carbon dioxide emissions, and we look forward to executing this important project with high-quality industry partners and creating a strong investment for our funds.”

The proposed system plans to transport liquefied carbon dioxide through the pipeline, ranging from 6” to 16” in diameter, for delivery into a central sequestration facility contemplated to be in south-central Illinois. Navigator is expected to lead the construction and operations of the system, and Valero is expected to become an anchor shipper by securing a majority of the initial available system capacity.

Joe Gorder, Valero Chairman and Chief Executive Officer, said:

“This project demonstrates our leadership in energy transition through innovation in renewables. We continue to expand our long-term competitive advantage with investments to produce lower carbon fuels.”

Matt Vining, Navigator’s Chief Executive Officer, added:

“Now is the time for industry-leading market participants to join forces to complete an environmentally focused midstream project of this size and scale. Harnessing our collective resources and strengths will create a unique infrastructure project that changes the way carbon emissions are managed.”

The companies expect the CCS pipeline system to begin operation in late 2024.

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