Montana’s Big Sky Hub Reinvents Carbon Storage

U.S. Energy and CANUSA EPC break ground on a Montana hub linking CO₂ EOR, sequestration, and helium

12 May 2026

U.S. Energy Corp has reached a final investment decision to develop the Big Sky Carbon Hub in northern Montana, marking a shift toward integrated carbon capture and storage models. The project, located in Toole County’s Kevin Dome, involves a fixed-scope construction contract with CANUSA EPC. Operations are scheduled to begin in the first quarter of 2027.

The development spans 80,000 acres and centers on the extraction and deployment of naturally occurring gases. Phase 1 estimates suggest the site contains 444bn cubic feet of carbon dioxide (CO2) and 1.3bn cubic feet of helium. The facility is designed to process 8m cubic feet of gas per day, with an annual target of 125,000 metric tons of refined CO2. This output will be split between enhanced oil recovery (EOR) operations and permanent underground storage.

This project’s financial structure relies on three distinct revenue streams, an approach intended to mitigate the volatility often associated with carbon-only assets. Helium production serves as a primary economic anchor; in the first quarter of 2026, U.S. Energy secured a five-year "take-or-pay" agreement with an industrial gas buyer. This contract requires the buyer to pay for the gas regardless of whether they take delivery, providing a guaranteed cash flow before the plant is commissioned.

Construction of the gathering pipelines began in early 2026, with plant commissioning expected by the third quarter of the year. The use of a fixed-scope contract is intended to provide cost certainty and schedule accountability, addressing the budget overruns that frequently affect development-stage energy infrastructure.

From a policy perspective, the Big Sky project reflects the maturing economics of the American carbon capture sector. While the federal 45Q tax credit, which provides incentives for geological carbon storage, bolsters the project's profile, the hub is privately financed. This distinguishes it from earlier US carbon initiatives that relied heavily on government grants.

Despite the secured financing, risks remain. Commercial agreements for CO2 offtake with large-scale distributors are still under negotiation. Furthermore, the industry has historically struggled with "first-of-kind" builds, which often face technical delays. However, if successful, the Montana hub could serve as a blueprint for combining industrial gas production with long-term carbon management.