Occidental and its subsidiary, 1PointFive, have signed an agreement with XRG, the investment arm of Abu Dhabi National Oil Co., to assess a potential joint venture for the development of a Direct Air Capture (DAC) facility in South Texas. As part of the evaluation, XRG may invest up to $500 million in a project designed to capture 500,000 metric tons of carbon dioxide annually.

The Strategic DAC Framework Agreement was signed by Occidental President and CEO Vicki Hollub and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber during U.S. President Donald Trump’s state visit to the United Arab Emirates.

The agreement builds on recent momentum in DAC development, including progress on Occidental’s STRATOS project in West Texas, which remains on schedule to begin commercial operations in 2025. Occidental has also continued to advance and de-risk its DAC technology and received a U.S. Department of Energy award of up to $650 million to support the South Texas DAC Hub’s development.

“We are proud to expand our decades-long partnership with ADNOC and XRG through our South Texas DAC Hub,” Hollub said. “This project supports U.S. energy security and global climate goals. Agreements like this, backed by the U.S. DOE, show growing confidence in DAC as a viable, investable solution that creates jobs and economic value in Texas and beyond.”

XRG Chief Operating Officer Khaled Salmeen said the partnership reinforces a shared commitment to high-growth, sustainable investments. “The U.S. remains a priority market for XRG, and we are excited to deepen our collaboration with Occidental across the energy value chain,” he said.

Occidental and ADNOC began exploring collaborative carbon capture, utilization and storage (CCUS) opportunities in the United States and the UAE following a memorandum of understanding signed in 2023.

The South Texas DAC Hub will be located on King Ranch in Kleberg County, near key industrial and energy infrastructure along the U.S. Gulf Coast. The site spans roughly 165 square miles and offers the potential to store up to 3 billion metric tons of carbon dioxide in underground formations. The first facility at the hub, now in the front-end engineering and design phase, will have the capacity to remove 500,000 metric tons of CO2 annually.

XRG targets large-scale, transformational investments in natural gas, chemicals and low-carbon energy. Occidental and ADNOC’s partnership history includes joint ventures in Al Hosn Gas and various oil and gas projects in the UAE.