By Michael Dabaie

Valero Energy Corp. and BlackRock Global Energy & Power Infrastructure Fund III said Tuesday they are working with Navigator Energy Services to develop an industrial scale carbon capture pipeline system.

The companies said they expect the initial phase to span more than 1,200 miles of new carbon dioxide gathering and transportation pipelines across five Midwest states with the capability of permanently storing up to 5 million metric tons of carbon dioxide a year.

The system could be expanded to transport and sequester up to 8 million metric tonnes of carbon dioxide per year, the companies said.

Valero is expected to become an anchor shipper by securing a majority of the initial available system capacity. Navigator is expected to lead the construction and operations of the system and anticipates operations to begin in late 2024.

In the coming months, Navigator will seek additional commitments to utilize the remaining capacity through a binding open season process.

Navigator will work with each counterparty to install or connect the carbon capture equipment to the pipeline at receipt points in Nebraska, Iowa, South Dakota, Minnesota, and Illinois.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

03-16-21 0927ET