Verde Clean Fuels and Diamondback Energy have an agreement in place to construct a facility in the Permian Basin that will utilize stranded natural gas to produce 3,000 barrels per day of low-carbon gasoline.

The facility requires around $325m of capex.

Both Verde and Diamondback will take equity stakes in the project, and Verde will seek to bring in debt financing to fund the rest of the project costs in a non-recourse project finance deal.

The project seeks to provide a pathway to monetize stranded gas in the Permian basin by taking advantage of and alleviating its lack of takeaway capacity, which causes gas prices at the Waha Hub in West Texas to trade at a significant discount to the Henry Hub price.

As of February 2024, Verde is planning to seek project debt and equity investors to finance a series of low-carbon gasoline refineries across the US.