Pawnee CCS project reaches final investment decision in Texas

By Rebecca Stone

Ozona CCS and Marubeni have committed to a Texas carbon dioxide storage project designed to store up to approximately 400,000 metric tons annually, with first injection targeted for the first quarter of 2027.

What did the partners decide?

The final investment decision advances the Pawnee Carbon Sequestration Project in Bee County, Texas, beyond development planning and toward construction and eventual operations. The announcement covers a storage venture, not a completed sequestration record.

The partners reported a “successful injection test” at the Sligo Formation, the geological formation selected for the storage operation. Pawnee will use an existing well adapted for underground injection. These steps connect the investment decision to a defined geological site, although they do not establish commercial operating capacity.

The design calls for approximately 400,000 metric tons of carbon dioxide storage per year. That figure represents planned annual throughput. It does not mean the facility has stored 400,000 metric tons, and it remains a target until injection and operating performance show the project can sustain that rate. That capacity remains prospective.

Who will build, operate and sell the credits?

Ozona will develop and operate the project facilities, while Japanese trading group Marubeni will manage marketing and commercialization of the carbon credits generated by Pawnee. The companies also are considering further carbon storage investments in Texas.

That division places Ozona in charge of the storage facilities and Marubeni in charge of the commercial channel for carbon credits.

Carbon credits could provide an additional revenue stream, but their value depends on market demand, applicable rules and the project's ability to deliver verified storage. The announcement therefore links two tests: technical performance underground and buyer acceptance for the resulting credits.

Where will the carbon dioxide come from?

Pawnee is designed to permanently store carbon dioxide from natural gas processing. Ozona and Marubeni announced their partnership in September 2024, with plans to capture emissions from multiple natural gas production and processing facilities in South Texas.

Beyond Pawnee, the broader partnership concept calls for transporting captured gas through dedicated pipelines and storing it in underground saline formations. Pawnee itself uses an existing injection well, while the pipeline plan remains part of the broader partnership concept.

Why does Texas matter to the storage market?

The decision reflects a wider push to establish carbon capture and storage infrastructure across the U.S. Gulf Coast. The process separates carbon dioxide from industrial processes, transports it to designated sites and injects it into underground geological formations for long-term storage. Texas energy companies are developing those systems as ways to manage emissions from established industrial operations.

Other energy companies are pursuing similar storage projects in the region. BKV Corporation announced a separate South Texas carbon storage investment decision in 2024, targeting annual sequestration of about 90,000 metric tons. Pawnee's planned annual volume is more than four times BKV's target.

Together, the announcements point to a developing market for emissions-management infrastructure alongside South Texas's oil and gas industry. They also show how storage investment can sit downstream of natural gas processing, where carbon dioxide requires a route from industrial operations to a selected formation.

What has to happen before 2027?

The final investment decision is an important step, but Pawnee's proposed storage volume and operating date remain targets rather than completed results. Construction progress, regulatory requirements, operating performance and commercial arrangements will determine whether the project meets its planned launch and capacity.

U.S. federal incentives have supported carbon storage development. Marubeni previously highlighted tax credits under the Inflation Reduction Act for qualifying carbon dioxide storage projects, subject to applicable requirements. The incentive can support project economics, while execution remains the condition for delivering the promised capacity.

• Construction must convert the final investment decision into completed storage facilities.
• Applicable regulatory requirements must be met before commercial operations.
• Injection performance must progress from a successful test to repeatable storage at the planned annual rate.
• Marubeni must establish commercial arrangements that support carbon-credit sales.

A successful injection test supports the site plan, but it does not settle those construction, regulatory or market questions. Nor does a final investment decision by itself provide operating capacity. The 400,000-metric-ton annual rate becomes meaningful only when the facility demonstrates sustained delivery and verified storage.

The decisive next milestones are meeting applicable regulatory requirements and completing commercial arrangements; both will determine whether Pawnee can meet its planned launch and capacity. The first-quarter 2027 injection date remains the key operating deadline.

Until injection starts and performance is verified against the target, the project remains an announced Texas storage asset with a large planned capacity, not a completed annual sequestration operation.