ExxonMobil is engaged in serious discussions with major US data center developers, known as hyperscalers, to lower the carbon footprint of their AI-driven projects using carbon capture and storage (CCS) technology. CEO Darren Woods expressed optimism about reaching a project agreement by year-end, despite broader political headwinds against alternative energy.

Strategic Position and Market Outlook

Woods identified CCS attached to gas-fired power generation as the only viable large-scale option for reducing data center emissions. He acknowledged the market is moving past initial "hype and enthusiasm" toward practical implementation. The company's strategic position was bolstered by its $5 billion acquisition of Denbury, which provided over 1,300 miles of CO2 pipelines, enabling substantive commercial conversations with hyperscalers committed to finding competitive decarbonization solutions.

Project Development and Infrastructure

ExxonMobil is working through the commercial details for a specific site that meets hyperscaler needs, with the hope of a project announcement by the end of the year. The company aims for a final investment decision on a low-carbon data center project by the end of 2026. Its CCS capabilities are supported by existing customer contracts for sequestering about 9 million tonnes of CO2 annually through what it calls the world's first large-scale end-to-end CCS system.

Existing CCS Operations and Permits

The company has already operationalized CCS projects, including a third-party project with CF Industries at a Louisiana ammonia plant, expected to sequester up to 2 million tonnes of CO2 annually. Furthermore, ExxonMobil received an EPA permit in October for a Class VI CO2 injection well for its Rose CCS project in Texas. This project plans to transport CO2 via a 29-kilometre pipeline to be sequestered 2.4 kilometres underground across 13,000 privately owned acres.