Milestone Carbon is looking for industrial partners that need carbon sequestration services, with an eye on low-carbon fuel producers, thermal power plants and cement factories as potential anchor tenants.
The Houston-based company, a subsidiary of Milestone Environmental Services, is putting sequestration wells in now in order to attract early emissions from natural gas processing facilities in the Permian Basin, Senior Vice President Chris Davis said in an interview.
Getting established with early emitters will help attract new anchor partners from the low-carbon fuel, cement, and thermal power industries that are looking to build facilities with longer development timelines, said Davis.
Milestone last week announced an agreement to lease more than 22,000 acres of land and pore space for permanent geologic sequestration of CO2, which will form part of its two CO2 sequestration hubs in both the Delaware and Midland basins.
With a Class II injection well from the Texas Railroad Commission in hand, and depending on the timing of infrastructure build-out and finalized commercial agreements, Milestone could begin injecting CO2 as early as 2025, placing it among the earliest to begin permanent sequestration in Texas.
“We want to plant our flag out front so that these low-carbon industries that are still in development phase, they say, ‘We’re thinking with the end in mind. I now know where I can plan my new facility and optimize around that,’” Davis said.
The company is open to co-investment in projects, but it’s not a requirement for what it is pursuing currently, Davis said.
The parent company, Milestone Environmental Services, was recently acquired by New York-based SK Capital from its previous investor, Amberjack Capital.
SK took a controlling stake in Milestone in partnership with President and CEO Gabriel Rio, who will continue to serve in that role and retain significant ownership in the company.
Early emissions
The Delaware and Midland basins within the Permian are active areas for hydrocarbon activity, where carbon from natural gas processing can be captured and sequestered. There are additional existing and potentially new sources of carbon emissions from industry, as well as anticipated direct air capture projects, Davis noted.
“We have over the last two years been evaluating different sites that we think would be really attractive and advantaged for decarbonization for heavy industry, and have been systematically leasing up land in different places,” he added.
In the Midland Basin, for example, there are over 2 million tons of existing emissions from natural gas processing within 30 miles of Milestone’s site. Many of the natural gas processing facilities already have carbon separation facilities and are emitting high-purity CO2 into the atmosphere.
“In those instances, we’re stepping in there, compressing that CO2, dehydrating it and moving it through pipelines into our wells,” he said.
Milestone is designing wells around 500,000 tons to 1 million tons per year, under the belief that the company needs to get smaller-scale carbon sequestration projects off the ground now.
“We think there’s a real opportunity here to develop some lower-complexity, faster-to-market projects,” he said.
Strategically, getting the early emissions in the ground helps to establish the hub to attract future larger facilities with longer development cycles, he said.
“We can get the emissions in from the gas plants and then be ready with the Class VI wells for these larger-volume projects.”
Anchor partners
Milestone is interested in providing carbon sequestration solutions to partners with anticipated emissions in the hundreds of thousands of tons of CO2 per year. Once these anchor partners are committed, the company can start to accept smaller emissions sources such as direct air capture companies, which are trying to hit around 50,000 tons per year initially.
Developers of low-carbon projects requiring sequestration that are not thinking early on in the development process about how to dispose of CO2 might find, in the end, that they don’t have a place to put it, he said.
“Another message that I’m trying to get out there to people is that low-cost pore space is scarce – it’s more scarce than people believe,” he said. “To get it permitted, to get the landownership rights, to meet all of the regulatory requirements, takes a lot of time and capital, and there’s a scarcity of those sites that will be available pre-2030 for emissions.”
Milestone has fielded inquiries on potentially supplying CO2 as a feedstock for e-fuels, but for now is focused on geologic sequestration.
