Oxy Low Carbon Ventures, LLC’s Investment in NET Power, LLC


White & Case LLP has advised 8 Rivers Capital, LLC on the deal

NET Power, LLC, and Oxy Low Carbon Ventures, LLC (OLCV), a subsidiary of Occidental Petroleum Corporation (NYSE: OXY), have reached an investment agreement, subject to regulatory approval.

The investment will advance the development of NET Power’s low-cost, natural gas electric power system that generates no atmospheric emissions and inherently captures all carbon dioxide (CO2). Upon receiving regulatory approval, OLCV will join current investors Exelon Generation (NYSE: EXC), McDermott (NYSE: MDR), and 8 Rivers Capital.

NET Power has developed a novel power system that produces low-cost, reliable, and flexible electricity from natural gas, while generating no atmospheric emissions, including full CO2 capture and no NOx production. In May of this year, NET Power achieved first-fire at its 50MWth La Porte, Texas, demonstration facility, which is the world’s first and only industrial-scale supercritical CO2-based power plant. The first phase of testing successfully demonstrated the novel combustor at full scale and the operability of the NET Power process. The last phase of testing will commence shortly and is expected to be completed by early 2019. At that time, NET Power expects to have the data necessary to commence detailed engineering of 300MWe commercial scale plants with major power, oil and gas, and industrial customers around the world.

In addition to electricity, NET Power plants will generate all CO2 as a low-cost, pipeline-ready byproduct. Occidental Petroleum is the industry leader in using CO2 to enable low-cost enhanced oil recovery (EOR), which can increase oil recovery by 10 to 25 percent in the fields where it is employed, while at the same time permanently sequestering the CO2 in the reservoir. NET Power’s CO2 can be used in a variety of other industrial processes that sequester the CO2, including cleaning up large quantities of low-cost sour gas. Finally, NET Power plants also co-generate nitrogen, argon and process heat, driving lower-cost, lower-carbon industrial processes, such as cheap, zero-carbon hydrogen production.

NET Power sees a large, global demand for its technology, made even greater by the passage of 45Q carbon capture tax credit reform in the U.S., the growing demand for low-cost CO2 for industrial processes that use and sequester CO2, and the global shift toward lower-carbon energy production. NET Power’s reliable, dispatchable, zero-carbon energy provides a necessary and enabling complement to growing renewable generation, while helping the world to reach even deeper decarbonization targets at the lowest cost.

8 Rivers Capital is a Durham NC–based firm leading the innovation of sustainable infrastructure-scale technologies. As the inventor of the Allam Cycle, 8 Rivers Capital also focuses on developing economic and sustainable production of hydrogen, (including uses for the CO2 captured by the cycle) as well as the production of ethylene and other valuable products, and the removal of sulphur impurities from gas streams.

The White & Case team that advised on the transaction included partners Michael Smith (Picture) and Raymond Azar, as well as associate Jeff Kaplan all in New York.

Involved fees earner: Raymond Azar – White & Case; Michael Smith – White & Case;

Law Firms: White & Case;

Clients: 8 Rivers Capital LLC;

Author: Ambrogio Visconti