Diamondback Energy, the Permian Basin’s largest independent oil producer, has signed a non-binding letter of intent (LOI) to develop a long-term power purchase agreement (PPA) with fast fission power technology company Oklo.
The contract is intended to install Oklo’s Aurora power plant and provide emissions-free power to Diamondback operations in the Permian Basin for 20 years, with extension options.
Santa Clara, Calif.-based Oklo will provide Diamondback E&P LLC, a wholly owned subsidiary of Midland, Texas-based Diamondback Corp., with a “power plant capable of producing 50 MW of electricity,” according to an LOI signed on Monday. ” will be licensed, constructed and operated. April.
The agreement outlines options to renew and extend the potential PPA for an additional 20 years, given that Oklo’s design is expected to operate for 40 years. Additionally, Oklo’s design-build-operate business model allows potential customers to purchase power without complex ownership issues or other capital requirements, the company said.
Fast reactors use liquid sodium, lead, or other coolants instead of water to remove the heat produced by nuclear fission and produce steam to drive turbines for electricity generation. Fast reactors also reuse nuclear fuel and produce more fuel than they consume.
On March 12, Oklo National Laboratory and Argonne National Laboratory began testing on the Thermal-Hydraulic Experimental Test Article (THETA), a world-class instrumented sodium facility installed at Argonne’s Mechanism Engineer Test Loop Facility. It was announced that the second phase of the campaign has been successfully completed.
The test campaign focused on the key thermo-hydraulic behaviors of Oklo’s fast fission reactor design to accelerate reactor optimization and market penetration of the technology, the company said in a news release.
Oklo shared the cost of the work done at Argonne with funding from the U.S. Department of Energy’s Nuclear Innovation Acceleration Gateway Voucher.
“Argonne’s leadership and technical expertise are critical to THETA’s success, and the completion of the second phase of testing is a major accomplishment,” Patrick Everett, Oklo’s deputy senior director of products, said at the time.
“THETA has and will continue to play a critical role in Oklo’s testing efforts in support of Aurora’s strong product commercialization plans,” he added.
In February, Diamondback Energy acquired Endeavor Energy Resources in a cash and stock deal worth about $26 billion, making Diamondback the Permian Basin’s largest independent oil producer.
“Oklo is poised to meet the growing energy requirements of carriers like Diamondback by developing and delivering low-cost, highly reliable, emissions-free energy sources,” said Oklo CEO. Jacob DeWitte said in a company news release.
“The collaboration between Oklo and Diamondback is an important step toward reducing emissions and supporting national energy security by providing reliable electricity access to power domestic energy businesses.” he added.
In July 2023, Oklo entered into a merger agreement with AltC Acquisition Corp., a special purpose acquisition vehicle, with the aim of going public upon completion of the transaction, expected in late 2023 or early 2024.
