To estimate the carbon dioxide (CO₂) injection and storage capacity of saline formations, we used Tough2‐ECO2N simulation software to develop a pressure‐limited (dynamic) simulation approach based on applying three‐dimensional (3D) numerical simulation only on the effective injection area (A_eff) surrounding each injection well. A statistical analysis was performed to account for existing reservoir heterogeneity and property variations. The accuracy of the model simulation results (such as CO₂ plume extension and induced injection well bottomhole pressure values) were tested and verified against the data obtained from the Decatur CO₂ injection study of the Mount Simon Formation. Next, we designed a full‐field CO₂ injection pattern by populating the core sections of this formation with a series of the simulated effective injection areas such that each simulated A_eff acts as a closed domain. The results of this analysis were used to estimate the optimum number and location of the required CO₂ injection wells, along with the dynamic annual CO₂ injection rate and overall pressure‐limited storage capacity of this formation. This approach enabled us to model separate CO₂ injection activities independently at different sections of the same saline formation and to model and simulate faults and natural barriers by considering them as boundary conditions for each simulated A_eff without constructing full‐field models. Using this approach, a series of modeled A_eff with relevant properties may be redesigned to model any other saline formation with a similar structure.