Oklahoma-based Lone Cypress Energy Services has set its sights on developing California’s first blue hydrogen facility, having sealed a CO2 management agreement with California Resources Corp. (CRC) and Brookfield Renewable’s freshly launched joint venture (JV) called Carbon TerraVault (CTV).

The agreement, announced Dec. 7, paves the way to CTV’s first permanent carbon storage project, sequestering 100,000 metric tons (MT) of CO2 per annum from a new blue hydrogen plant at the CRC-operated Elk Hills Field in Kern County, Calif., CRC said in a news release.

The planned Lone Cypress Hydrogen Project aims to initially produce 30 tons of blue hydrogen per day using a proprietary steam methane reformation technology. The amount of hydrogen produced could double, according to CRC, resulting in the sequestration of 200,000 MT of CO2 per annum.

“Partnering with CTV JV represents an incredible opportunity to continue the growth of our hydrogen and carbon capture businesses,” said Greg Brooks, president and founder of Lone Cypress Energy Services. “California is at the forefront of the global energy transition and through this partnership, we intend to be a leader in its low-carbon fuels market.”

News of the project comes as the U.S. aims to lower its emissions and hit a 10 million-tonne clean hydrogen production target by 2030, eventually reaching 50 million tonnes by 2050. The renewable energy source, seen as a way to decarbonize hard-to-abate sectors, has near-zero emissions and as a fuel produces only water vapor and water when burned.

California, which is seeking federal funds for a regional hydrogen hub, is targeting 200 hydrogen refueling stations by 2025.

Lone Cypress Hydrogen Project

The Lone Cypress project intends to provide cost-competitive blue hydrogen to the state’s zero emissions mobility and industrial markets.

The hydrogen generation and distribution project specialist will bring its subsurface operations and permitting expertise alongside complex project delivery experience to the table, while CTV will provide infield transportation, permanent CO2 sequestration and its carbon capture and sequestration technology.

CRC CEO Mac McFarland said the company is enabling a net-zero energy economy by partnering with Lone Cypress.

“Because capture and compression are built into the project development, we anticipate limited capital requirements from the CTV JV and EBITDA per metric ton within our previously stated range,” said CRC CEO Mac McFarland. “This CTV storage project is a meaningful step forward in CRC’s rollout of carbon capture and sequestration technology across the state and is the first of, what we believe, will be many projects to come.”

The agreement, according to a news release, gives Lone Cypress access to 50 surface acres at the Elk Hills Field with an option for 50 more acres if the project expands to 60 tons per day. Also as part of the agreement, CTV has the option to acquire a majority equity stake in the project and provide sequestration services for any future hydrogen project developed by Lone Cypress in California.

Developers anticipate making a final investment decision in late 2023. They are targeting first injection in 2025 and the start of full operations by year-end 2025.