California Resources (CRC) and its Carbon TerraVault unit said Monday that the latter will develop Net Power's (NPWR) ultra-low emission power plants in California under a memorandum of understanding.

The MoU marks Net Power's entry into the state's power market, the companies said.

Under the agreement, the companies will conduct feasibility studies on locating Net Power's facilities close to Carbon TerraVault's underground storage vaults to facilitate the initial deployment of up to 1 gigawatt of power capacity from Net Power's new modular plants in northern California, according to a statement.

Shares of California Resources advanced 2.5% in early trading, while Net Power was up 0.4%.

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