Texas-based oil & natural gas company U.S. Energy Corp. has reached a Final Investment Decision (FID) to proceed with construction of its Big Sky Carbon Hub processing facility in Montana. Reaching FID for Big Sky Carbon Hub is a major milestone for U.S. Energy in industrial gas production, carbon management, and enhanced oil recovery in the Rocky Mountain region. The company also announced that it has started capital spending, executed a fixed-scope EPC (Engineering, Procurement, and Construction) agreement with CANUSA EPC, and is now advancing toward commercial operations targeted for the first quarter of 2027.

How Big Sky Carbon Hub Operates

Positioned at the heart of the Kevin Dome structure in north-central Montana, Big Sky Carbon Hub is an integrated industrial gas and carbon management initiative. It is designed to produce high-purity helium, capture and refine CO2 for sequestration and enhanced oil recovery (EOR).

The processing facility is designed for approximately 8.0 MMcf/d of inlet capacity, with initial annual outputs estimated at about 12 million cubic feet of high-purity helium and 125,000 metric tons of refined CO2. U.S. Energy expects these outputs to drive early revenue from helium sales, carbon management credits, and CO2-enhanced oil recovery on nearby acreage.

The company has also assembled about 80,000 net acres of operated leases at Kevin Dome. This is backed by independently evaluated resources of around 1.3 billion cubic feet (Bcf) of helium and 444 Bcf of CO2, supporting a multi-decade development horizon with minimal drilling risk in the initial phase.

Federal Tax Incentives

The project also unlocked federal tax incentives under the U.S. Section 45Q carbon credit regime. Federal incentives under Section 45Q which provide tax credits for carbon captured and sequestered are expected to contribute an estimated $130 million of value in Phase 1 economics. This is also a great tell of the project’s financial case.

Big Sky Carbon Hub Processing Facility Project Factsheet

Location: Kevin Dome, Toole County, Montana

Developer/Owner/Operator: U.S. Energy Corp.

Project type: Industrial gas production and carbon management facility

Expected commercial operations: Q1 2027

Final Investment Decision: March 18, 2026

EPC contractor: CANUSA EPC (fixed-scope EPC contract)

Initial design inlet capacity: 8.0 MMcf/d

Annual helium production: 12 million cubic feet

Annual refined CO2 output: 125,000 metric tons

Tax incentives: Qualifies for Section 45Q federal tax credits ($85/metric ton). About US$130 million Phase 1 value

Pipeline infrastructure: 10 miles of in-field gathering pipelines planned spring 2026

Feedstock: Three low-decline industrial gas wells already drilled

Revenue streams: Helium sales, carbon management credits, CO2-enhanced oil recovery

Key Stakeholders Behind Big Sky Carbon Hub Processing Facility

• U.S. Energy Corp. – Developer, Owner & Operator
• CANUSA EPC – Engineering, Procurement & Construction Contractor

Research & Geological Characterization Partners

• Big Sky Carbon Sequestration Partnership – Regional Carbon Storage Research Consortium
• Idaho National Laboratory – Federal Research Laboratory Partner
• Lawrence Berkeley National Laboratory – Carbon Storage Modeling & Monitoring Partner
• Lamont-Doherty Earth Observatory – Geological & Seismic Research Partner
• Los Alamos National Laboratory – Subsurface Science & Carbon Storage Research
• Schlumberger – Carbon Storage Technical & Engineering Support
• Vecta Oil & Gas – Regional Industry & Field Data Partner

Regulators & Permitting Authorities

• U.S. Environmental Protection Agency – Federal Environmental Regulator (MRV & Injection Permits)
• Montana Department of Environmental Quality – State Environmental & Permitting Authority
• Montana State Historic Preservation Office – Cultural & Land Use Compliance
• Toole County Government – Local Planning & Host Authority

Finance & Regional Development Bodies

• Montana Facility Finance Authority – Public Infrastructure & Development Finance Support

Local Stakeholders

• Toole County Landowners & Community Representatives – Land Access & Surface Rights Partners

Project Outlook

Big Sky Carbon Hub is a show of the emerging shift in North America’s carbon management landscape toward integrated industrial hubs that combine gas processing with sequestration infrastructure. Unlike conventional carbon capture facilities that focus solely on emissions abatement, Big Sky monetizes multiple product streams. These include helium, refined CO2, and enhanced oil recovery feedstock, allowing the project to diversify its revenue base. This integrated approach contrasts with purpose-built capture projects such as the AtmosClear carbon capture facility in Louisiana, which is designed primarily to capture and condition industrial CO2 emissions for transport and storage.