The correct option is C Heterocyst
Nitrogen fixation is carried out in specialized cells known as heterocysts in Nostoc, which have thick cell walls that offer necessary anaerobic conditions for the activity of nitogenase enzyme. These cells have a high rate of respiration that scavenges the diffused oxygen and they lack photosystem 2 because of which there is no splitting of water and evolution of oxygen during photosynthesis. Hence option B is correct.