California Resources Corporation (CRC) and its carbon‑management subsidiary, Carbon TerraVault, entered into a non‑binding Memorandum of Understanding with Middle River Power (MRP) to provide carbon transportation and permanent sequestration services for MRP’s two existing power plants in Northern California. The High Desert plant in Victorville, a 850‑MW natural‑gas facility, and the San Joaquin Energy Center in Tracy, a 330‑MW plant, together emit approximately 2.75 million metric tons of CO₂ annually—2.1 MMTPA from High Desert and 0.65 MMTPA from San Joaquin.
The agreement marks CRC’s third MOU with a brownfield power producer and its first in Northern California. CRC will leverage its existing Class VI permits, obtained for CO₂ sequestration at its Elk Hills Field, and its established transportation network to capture, transport, and store the CO₂ from MRP’s plants. By doing so, CRC expands its Power‑to‑CCS platform, creating a new revenue stream that complements its core oil and gas operations.
Strategically, the deal positions CRC as the only California company offering a fully integrated carbon capture and storage solution for brownfield power producers. The partnership aligns with state legislation that encourages carbon transport and storage, and it supports California’s decarbonization goals by reducing emissions from existing generation assets. The MOU also signals CRC’s continued focus on monetizing its carbon‑sequestration capabilities, a key pillar of its long‑term growth strategy.
From a financial perspective, the MOU is expected to generate incremental revenue and enhance CRC’s operating leverage. While the exact financial impact is not yet quantified, the addition of two high‑emission plants provides a sizable and predictable CO₂ volume that can be captured and stored under CRC’s existing infrastructure. The deal also demonstrates CRC’s ability to secure new contracts in a competitive market, reinforcing investor confidence in its carbon‑management business.
Management emphasized the significance of the partnership. CEO Francisco Leon noted that the agreement “highlights growing momentum across the power sector seeking practical and economically feasible decarbonization solutions in California.” MRP CEO Mark Kubow added that the MOU “marks a strategic step forward in decarbonizing our existing generation infrastructure and helping the state achieve its ambitious climate and reliability goals.”
The announcement was met with a muted market reaction, as investors focused on broader energy market dynamics, particularly the recent decline in crude oil prices. The MOU itself was viewed as a positive development for CRC’s carbon‑management segment, but it did not generate a strong immediate response in the broader market.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.