TotalEnergies to buy Talos’ US carbon capture business for $148 million

Supermajor will retain one CCS asset and sell two others, as Talos focuses on core upstream business

TotalEnergies has signed an agreement to acquire 100% of Talos Low Carbon Solutions (TLCS), an early-mover US company focused on carbon capture and storage, for $148 million.

After completion of the transaction, TotalEnergies will own a 25% share in the Chevron-operated Bayou Bend CCS project located on the Texas Gulf Coast.

The supermajor will also own a 65% operated interest in the Harvest Bend project in Louisiana and a 50% stake in the Coastal Bend project in Texas, but plans to sell these assets after the deal closes.

Bayou Bend aims to transport and store carbon for industrial emitters located in the Houston Ship Channel and Beaumont-Port Arthur region, one of the largest industrial corridors in the US.

Comprising licenses dedicated to carbon dioxide storage, offshore and onshore, covering about 600 square kilometres, this asset could enable the storage of several hundred million tonnes of CO2, said TotalEnergies, stressing that its location, size and geological characteristics make it “a world-class opportunity”.

TotalEnergies chief executive Patrick Pouyanne said: “Ideally located close to our Port Arthur refinery and our petrochemicals assets in La Porte, this project will be instrumental for the reduction of direct emissions from our US operations.

“This transaction gives momentum to the decarbonisation of hard-to-abate US emissions and marks a milestone on our journey to get to net zero by 2050, together with society.”

Talos chief executive Timothy Duncan said: “Strong market interest during our capital raise provided the strategic option to fully monetise the business to TotalEnergies.

“The transaction will further enable Talos to prioritise cash flow generation and optimal capital allocation in our core upstream business. We are also continuing to explore business development and strategic merger and acquisition opportunities.”

Talos said the purchase price of $125 million is supplemented by customary reimbursements, adjustments and retention of cash, which brings to total to about $148 million.

It could secure additional cash payments when certain milestones are achieved at Harvest Bend or Coastal Bend or when TotalEnergies sells these assets.

The transaction was based on an effective date of 1 January 2024 and will close today, said the seller, which will use the sale proceeds to immediately repay borrowings under its credit facility and for general corporate purposes.

Robin Fielder, Talos’ head of low carbon strategy and chief sustainability officer, will continue to serve in her role for a transition period before leaving Talos.

Read the latest issue of the OGV Energy magazine HERE