Occidental's 1PointFive secures funding of up to $500 million from US DOE

(Reuters) - Occidental Petroleum's carbon capture and sequestration unit 1PointFive said on Thursday that the U.S. Department of Energy's Office of Clean Energy Demonstrations has committed up to $500 million to support the development of its South Texas Direct Air Capture (DAC) Hub.

The facility had previously received funding from BlackRock, the world's largest asset manager.

Occidental's first large-scale DAC facility represents a pivotal economic trial for a technology that the International Energy Agency says will play a key role for global industrial decarbonization, despite its high costs in initial tests.

The total award value from the OCED for the facility could be raised to $650 million for the development of an expanded regional carbon network in South Texas, according to a release from Occidental.

The hub's initial carbon dioxide removal capacity of 500,000 metric tons per year could be expanded to over one million metric tons per year, Occidental added.

Earlier this year, 1PointFive also said it would sell carbon credits to companies such as AT&T and Microsoft.

These carbon credits are tradable permits that allow the owner to emit specified amounts of greenhouse gases.

(Reporting by Seher Dareen in Bengaluru; Editing by Mohammed Safi Shamsi)