NextDecade Shares Jump 23% After Hours On Carbon Storage Agreement

Clean energy company NextDecade Corporation executed a term sheet with Oxy Low Carbon Ventures (OLCV) for the transport and permanent storage of CO2. Shares of NextDecade were up about 23% in Thursday’s extended trading session.

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NextDecade (NEXT) Chairman and CEO, Matt Schatzman said, “We are pleased to be working with OLCV to design, construct, and operate a CO2 pipeline and permanent storage facility in South Texas.”

Schatzman further added, “OLCV’s expertise and reliability complement the transformative and impactful contributions our NEXT Carbon Solutions business is making to the global energy industry, and in particular the proprietary processes we are advancing to lower the cost of utilizing CCS technology.”

Oxy Low Carbon Ventures is a subsidiary of Occidental. It will transport and store CO2 that will be captured from the Rio Grande LNG project of NextDecade in Texas.

Notably, Oxy Low Carbon Ventures will permanently store the transported CO2 underground in Rio Grande valley which has a natural formation for large CO2 storage.

NextDecade has also formed a subsidiary, NEXT Cabon Solutions, for developing a carbon capture and storage project at Rio Grande LNG which can capture and store more than 5 million tonnes of CO2 every year . (See NextDecade stock analysis on TipRanks)

The Moderate Buy consensus rating is based on a Buy recommendation by Credit Suisse analyst Spiro M. Dounis, who upgraded the stock to Buy from Hold on March 24. His price target of $3 implies upside potential of around 54% from current levels.

Dounis said, “In our view, NEXT’s Carbon Solutions initiative further differentiates its offering. At 90-100% of carbon offset, NEXT can now market a unique offering to support customer emissions targets. In our view, this initiative increases NEXT’s likelihood of success in commercializing Rio Grande.”