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CCUS developer closes 45Q direct transfer deal

A Mercuria Energy-backed CCUS developer has closed a 45Q direct transfer deal with assistance from Marathon Capital.

CapturePoint LLC has closed on a private Section 45Q direct transfer tax credit transaction for carbon dioxide (CO2) captured at the company’s Arkalon facility near Liberal, Kansas and utilized for Carbon Dioxide Enhanced Oil Recovery (CO2-EOR) operations in the panhandles of Oklahoma and Texas, according to a news release.

The CapturePoint Arkalon CO2 capture facility has the capacity to capture 250,000 metric tons of CO2 annually from nearby bio-ethanol production. CapturePoint transports the captured CO2 through its 170-mile regional network of dedicated CO2 pipelines to over 75 active CO2 injection wells the company uses for CO2-EOR operations. Once CO2-EOR operations cease, the CO2 is ultimately securely stored permanently underground.

The new Arkalon CO2 capture facility was placed in service in April 2023, generating Section 45Q tax credits for capturing and utilizing industrially sourced CO2 emissions. The Tax Credit Transfer Agreement between CapturePoint and the buyer includes placement of 100% of the 45Q tax credits generated by the Arkalon facility for a total of 12 years. At closing, CapturePoint will transfer all 2023-generated 45Q tax credits to the buyer.

“CapturePoint is at the leading edge of carbon management innovation in the United States,” said CEO Tracy Evans, “and our Arkalon CO2 capture facility and Panhandle CO2-EOR operations are helping the nation achieve important environmental and energy security goals. Our team is also developing expansive deep underground carbon storage sites – like our CPS Central Louisiana Regional Carbon Storage Hub — to permanently and safely sequester much larger volumes of CO2 currently released into the atmosphere by industrial emitters.”

The Section 45Q transaction announced today was placed privately by Marathon Capital. ReSource previously interviewed Evans last year about the company’s plans.

“We were honored to support CapturePoint on one of the industry’s first Section 45Q tax credit transfer transactions for their Arkalon CO2 capture facility,” said Matthew Shanahan, Managing Director at Marathon Capital. “We wish the CapturePoint team continued success as a leader in carbon management services.”

With both the Arkalon CO2 capture facility Section 45Q placement and an earlier transaction announced in January 2023 for CO2 captured at a nitrogen fertilizer facility in Coffeyville, Kansas, CapturePoint now has nearly one million metric tons per year of industrially sourced CO2 being utilized in CO2-EOR operations and generating 45Q tax credits.

CapturePoint LLC and its affiliate CapturePoint Solutions LLC offer a wide array of carbon management services and are pioneering the U.S. development of leading-edge carbon solutions including deep underground geologic carbon storage sites. The companies are privately held, with significant financial backing from prominent investors in clean energy innovation including an affiliate of Mercuria Energy, one of the world’s largest independent energy and commodity groups.

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