Climate Investment invests in KeyState Natural Gas Synthesis, first carbon capture and storage project in Pennsylvania, US

28 June 2022

Climate Investment

KeyState logo KeyState logo
  • KeyState is a first-of-its-kind project integrating on-site natural gas extraction, chemical production, and carbon capture and storage (CCS) in a closed carbon loop
  • Once operational, the 7,000-acre site is expected to have the capacity to store over 300,000 tons of CO2 per year
  • The project benefits from regional policies and incentives to encourage the responsible use of stranded natural gas

OGCI Climate Investment (OGCI CI), a specialist decarbonization investor, has invested in KeyState Natural Gas Synthesis (KeyState), a project company developing the first carbon capture and storage project in Pennsylvania, U.S. The project will integrate natural gas extraction, ammonia and automotive grade urea production, and CCS on a single 7,000-acre site.

The KeyState project could deliver significant near-term emissions reduction by storing CO2, as well as avoiding methane and CO2 emissions thanks to onsite natural gas production and vertical integration, and reduced transportation distance of products. Once operational, the site will enable CO2 cluster development to permanently store over 300,000 tons of industrial CO2 per year.

“KeyState has the potential to enable CCS in Pennsylvania, as well as the vertically integrated model as an example of the circular lower-carbon economy” Betty Pun, Technology Principal, Process Engineering and Carbon Capture at OGCI Climate Investment, said. “Not only does the project deliver emissions reductions directly, but we also see a role for KeyState as a catalyst for CCS hub development in the region.”

The first-of-a-kind project benefits from regional policies and incentives to encourage the responsible use of stranded natural gas, including decarbonization using CCS.

“Once operational, the KeyState project will pull natural gas, methane, up from a mile below the surface, separate the carbon and return the majority of it back deep underground, with the potential to permanently sequester more than 300,000 tons of CO2 per year,” KeyState CEO Perry Babb said. “I believe that the future for America’s natural gas is a lower-carbon future, combining gas production, CO2 extraction and permanent CO2 storage.”

OGCI CI’s investment in the project will be used to deliver pre-front end engineering and design (pre-FEED) activities for the natural gas synthesis plant and characterization of storage resources. These activities are intended to support the project ahead of further investment by additional partners at the FEED stage and beyond.

About OGCI Climate Investment

OGCI Climate Investment was formed by the Oil & Gas Climate Initiative, established by 12 oil & gas majors that account for around 30% of global operated production. OGCI aims to lead the industry’s response to climate change through action and independently managed investments.

Climate Investment is a $1bn+ decarbonization investor. We seek to accelerate GHG reduction at scale by working closely with OGCI members, governments, customers and co-investors to maximize the global implementation of low-carbon solutions and impact. We provide capital across the business lifecycle from the catalytic phase of technology and commercial validation through to scaling our investments’ sector and geographic coverage. We have invested in 29 technologies and projects since 2017.

Among our investment activities, we manage our Catalyst Fund I, and we are an investor in China Climate Investment. Both funds invest in solutions to decarbonize under-invested GHG-intensive sectors within energy, industry, built environments/buildings and transportation. Climate Investment targets solutions that deliver near-term GHG impact in three areas: reducing methane, reducing carbon dioxide emissions and recycling or storing carbon dioxide.

About KeyState Natural Gas Synthesis

KeyState Natural Gas Synthesis is a joint venture of KeyState, LLC/Developer and Frontier Natural Resources, Inc./Gas Supply & Geological Storage, and was born out of the dilemma of how to utilize a 7,000 acre, Northern Pennsylvania, stranded gas asset. The story actually began long before this with the vision of Dr. Forney (Fred) & Mary Winner in the 1970s to begin to assemble small parcels of land with the goal of creating commerce and jobs for this impoverished, remote region. Mary Winner, now in her 90s, says, “I am alive to fulfil my husband’s vision.” KeyState – Pennsylvania will create hundreds of construction and long-term high-value jobs, hundreds of millions of dollars of annual local economic activity and release a new industry for rural Appalachia, fulfilling and exceeding Fred and Mary’s vision.