The commercial-scale project would capture 90% of the carbon dioxide (CO2) in the processed flue gas from an existing unit at the WA Parish power plant in Fort Bend County, southwest of Houston.

Scheduled to be completed in 2016, the project would be the largest post-combustion carbon capture system in the world installed on an existing coal plant.

NRG president and CEO David Crane said: "By piping captured carbon exhaust into domestic oil fields, we both protect the environment and enhance domestic oil production benefitting our national energy security."

US Department of Energy Deputy Secretary Daniel Poneman said: "What is happening here today has global implications from an economic perspective, energy security perspective, and environmental stewardship perspective, and that’s why it is so important to take the global lead on this post-combustion CCS technology."

JX Nippon Oil & Gas Exploration president and CEO Shunsaku Miyake said: "The Project is pioneering in that it not only utilizes CO2 emissions from a coal-fired power plant, but also boosts the oil production, and ultimately reduces CO2 released into the air. Put simply, it addresses a global environmental issue."

The power plant will compress the CO2 captured, which will be piped approximately 80 miles to the West Ranch oil field, which is jointly owned by NRG, JX and Hilcorp.

The captured CO2, through Enhanced Oil Recovery (EOR), would create a revenue stream for the project by increasing domestic oil production from around 500 barrels per day to approximately 15,000 barrels per day.