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Oil and gas firm pivots to carbon storage for next fund

A Canadian energy investment firm will try to raise $500m for its seventh fund, says a market source, as it shifts its strategy to carbon capture and storage.

CIP's Craig Golinowski
CIP's Craig Golinowski: “We do not believe eliminating the oil and gas industry as a goal is the correct framework to reduce emissions”

JOG Capital is launching a $500 million private equity fund to invest in carbon capture and storage, an anonymous source tells New Private Markets, and is rebranding as Carbon Infrastructure Partners.

The energy investment firm declined to comment on the fundraise, but a source with knowledge of Carbon Infrastructure Partners said it was in early discussions with investors.

Calgary-based JOG, with $1.3 billion in assets under management, was founded in 2002 as a private equity firm for Canadian oil and gas exploration and production companies. It raised C$537 million ($435 million; €360 million) in 2012 for Fund VI, its last major fundraise.

The firm will invest in the process of storing and disposing of carbon waste to prevent it from entering the earth’s atmosphere. The US government provides subsidies and tax incentives for carbon capture and storage. Bank of America estimates that cumulative investment in the process could reach up to $1 trillion by 2050 and that CCS capacity could grow 100-fold by 2050. The firm will also continue to invest in hydrocarbon-based energy production.

“We believe the focus for energy and climate policy must be on reducing CO2 emissions,” said Craig Golinowski, one of the firm’s managing partners, in an emailed comment. “We do not believe eliminating the oil and gas industry as a goal is the correct framework to reduce emissions.”

In statement about the strategy shift seen by New Private Markets, the firm said: “Carbon Capture and Storage (CCS), an existing process and technology that reduces CO2 emissions, is widely recognized as one necessary approach to help achieve economy-wide emission reductions. The business and investment opportunity for CCS arises from this technology that returns carbon to the ground and is experiencing regulatory tailwinds and bi-partisan support both in the US and Canada. This represents a paradigm shift, as the US government subsidizes the capture and storage of carbon to incentivize and encourage net zero commitments – which we believe represents version 2.0 of viable, actionable, and tax-advantaged climate solutions.”

The firm’s last two funds jointly hold seven assets, which have been transferred to Carbon Infrastructure Partners.

Carbon Infrastructure Partners is headed by ex-JOG Capital directors Craig Golinowski and Ryan Crawford with Kel Johnston, another former JOG exec. The firm has also brought in David Moyes, former Goldman Sachs VP, as partner.