Stratos DAC Delay: Inside the Holdup at the World's Largest Carbon Capture Plant

1PointFive, a wholly owned subsidiary of Occidental Petroleum, has confirmed that its Stratos direct air capture (DAC) facility in Ector County, Texas, has hit an unexpected delay during Phase 1 commissioning. A non-process component issue was identified after the core technology passed its initial tests. No revised startup date has been announced. The company expects to provide an update on the repair timeline when it reports second-quarter 2026 earnings.

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What Caused the Stratos Delay?

During Phase 1 commissioning activities at the Stratos site, 1PointFive confirmed that air contactors and the central processing facility had performed as expected. Those elements of the DAC technology checked out.

The problem appeared after those steps were completed. Richard Jackson, then Occidental's Senior Vice President and Chief Operating Officer, addressed the issue on the company's Q1 2026 earnings call on May 6, 2026. He confirmed that Phase 2 construction was complete and described the nature of the Phase 1 hold-up.

Occidental confirmed the issue involves non-process components of the facility, meaning it is unrelated to the direct air capture technology itself. The company has not publicly identified the specific component involved.

Occidental also stated that the delay is not expected to change its 2026 capital spending range of $5.5 billion to $5.9 billion, though it noted the repair assessment was still in early stages.

This is not the first timeline shift for Stratos. The project originally targeted commercial operations by mid-2025, then by end of 2025, and then by Q2 2026. The project's total cost has also grown, from an initial estimate of $800 million to $1 billion in 2022 to $1.3 billion following BlackRock's investment in 2023.

How Large Is Stratos, and Why Does It Matter for DAC?

Stratos is designed to remove up to 500,000 metric tonnes of CO2 per year directly from the ambient air. That figure would make it the largest DAC facility in the world by a significant margin. For reference, the Mammoth plant operated by Climeworks in Iceland has a design capacity of 36,000 metric tonnes per year.

The facility operates in two phases. Phase 1 adds the first 250,000 metric tonnes per year of capture capacity. Phase 2 adds another 250,000 metric tonnes per year, bringing the plant to its 500,000-tonne annual design total. Construction of Phase 2 has been completed.

Stratos is a joint venture between 1PointFive and BlackRock, which committed $550 million on behalf of clients through its Diversified Infrastructure business in November 2023. The $550 million investment represented approximately 40 percent of the project's total $1.3 billion cost. The facility is located on former ranch land about 14 miles from Odessa, Texas, in Ector County in the Permian Basin.

For the carbon capture and storage industry, Stratos represents the first attempt to demonstrate DAC at commercial scale in the United States. Occidental has stated an ambition to build 100 similar DAC facilities by 2035, with Stratos as the commercial proof point.

Stratos Milestone	Most Recent Target	Status as of Q1 2026 Earnings Call
Phase 1 startup (250,000 tpy)	Q2 2026	Delayed. Repair timeline under evaluation.
Phase 2 commissioning begin (adds 250,000 tpy)	Q2 2026	Construction complete. Commissioning pending Phase 1 resolution.
Full 500,000 tpy operational ramp	Through end of 2026	Timeline under reassessment.
Next Occidental timeline update	N/A	Expected at Q2 2026 earnings call.

What Storage Infrastructure Is Already in Place?

One of the most significant milestones Stratos has already cleared is its underground storage permitting. The U.S. Environmental Protection Agency approved three Class VI injection well permits for the site in April 2025. These were the first Class VI permits ever issued in Texas and the first in the country for CO2 sequestration from a direct air capture project.

The three wells, designated BRP CCS1, BRP CCS2, and BRP CCS3, are located near Penwell, Texas, at a depth of approximately 4,400 feet in saline formations. Together they have a combined permitted storage capacity of 722,000 metric tonnes of CO2 per year. That figure exceeds Stratos's 500,000-tonne annual capture design, giving the site storage headroom as production ramps.

The permits were issued under the Safe Drinking Water Act's Underground Injection Control program and require ongoing monitoring of well integrity, groundwater quality, and CO2 movement throughout the operational life of each well. This carbon sequestration infrastructure remains in place regardless of the startup schedule.

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Who Has Already Purchased Stratos CDR Credits?

Corporate buyers have been locking in carbon dioxide removal (CDR) credits from Stratos ahead of the facility going online. The buyer list has grown steadily across multiple years of pre-commercial activity.

The largest single agreement is with Microsoft. In July 2024, 1PointFive and Microsoft announced a deal for 500,000 metric tonnes of DAC CDR credits over six years. At the time of the announcement, Microsoft described it as the largest DAC carbon credit purchase on record.

Amazon signed a 10-year agreement in September 2023 to purchase 250,000 metric tonnes of CDR credits from Stratos. Airbus agreed in March 2022 to purchase 400,000 metric tonnes over four years, at a rate of 100,000 metric tonnes per year, with an option to secure additional volume. AT&T announced its purchase agreement in March 2024; the volume was not publicly disclosed. Bain & Company signed in January 2026 to purchase 9,000 metric tonnes over three years, its first DAC removal credit purchase.

These commitments represent years of corporate CDR procurement and span sectors from technology to aviation to consulting. The agreements remain in place as Occidental works through the repair and revised startup timeline.

Buyer	Volume Committed	Term	Deal Announced
Microsoft	500,000 metric tonnes	6 years	July 2024
Amazon	250,000 metric tonnes	10 years	September 2023
Airbus	400,000 metric tonnes (100,000/yr)	4 years	March 2022
AT&T	Not publicly disclosed	Not publicly disclosed	March 2024
Bain & Company	9,000 metric tonnes	3 years	January 2026

Leadership Transition at Occidental

The Stratos delay coincides with a leadership change at Occidental. Vicki Hollub, who had championed the company's DAC strategy for several years, retired as President and CEO on June 1, 2026. The Occidental board approved Richard Jackson as her successor, effective the same date. Hollub will continue to serve on the Occidental board.

Jackson served as Occidental's Senior Vice President and Chief Operating Officer at the time of the Q1 2026 earnings call, where he was the primary spokesperson on Stratos. He confirmed both the completion of Phase 2 construction and the Phase 1 non-process component issue. His framing was measured: the technology works, the issue is a repair, and a timeline update is coming.

The 500,000 metric tonnes per year design capacity of Stratos makes it the centerpiece of Occidental's broader direct air capture expansion plans. That capacity, paired with the 722,000 metric tonnes per year of permitted underground storage, remains intact as Jackson takes over the leadership of the company.

Where Stratos Stands Right Now

The most important pieces of the Stratos project are already in place. Phase 2 construction is complete. The EPA Class VI storage permits for three injection wells with a combined capacity of 722,000 metric tonnes of CO2 per year are approved. CDR credit buyers representing hundreds of millions of dollars in future revenue are signed. The DAC technology itself cleared its Phase 1 commissioning tests.

What is unresolved is the repair timeline for the non-process component issue. Occidental has not disclosed what the component is, how long the repair will take, or how far the startup date will move from the original Q2 2026 target. That update is expected at the next earnings call.

Stratos remains the most closely watched carbon capture project in the United States. At 500,000 metric tonnes of CO2 per year in design capacity, it dwarfs every other DAC facility currently operating or under construction. The clock has shifted. The scale has not.

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