PETRONAS PUSHES FORWARD ON CCS

The Star

06-07-2025

KUALA LUMPUR: Malaysia's national oil and gas company Petroliam Nasional Berhad (PETRONAS) is progressing steadily with plans to begin carbon capture and storage (CCS) operations by end of 2029, targeting an initial storage capacity of 15 million tonnes of CO2 per annum.
The effort represents one of four key pillars in PETRONAS' decarbonisation strategy, supporting its long-term goal of achieving net zero carbon emissions by 2050. Apart from ensuring energy security for the nation, through the development of CCS infrastructure, the company aims to decarbonise its own operations while helping to build Malaysia's capability to offer storage solutions for industrial emitters across the region.
Speaking during a CCS media dialogue held on June 17 at the Kuala Lumpur Convention Centre in conjunction with Energy Asia 2025, Emry Hisham Yusoff, head of PETRONAS' carbon management division, said the company is establishing a network of offshore storage sites and related infrastructure such as pipelines, port terminals and CO2 transport vessels to serve both domestic needs and potential cross-border demand from Japan, South Korea and Singapore.
Reducing emissions through CCS
'Carbon capture and storage is one of the key pillars in PETRONAS' broader decarbonisation efforts,' Emry said.
'We've leveraged our offshore capabilities, including seismic data analysis and well drilling, to repurpose depleted oil and gas fields for permanent CO2 storage.'
He explained that CCS wells differ from traditional production wells in purpose and design. 'Unlike wells drilled to extract hydrocarbons, CCS wells are designed to inject CO2 deep underground and ensure it stays sealed,' he added.
PETRONAS' flagship Kasawari CCS project off the coast of Sarawak has commenced gas production and is progressing through the carbon capture phase. However, CO2 injection operations have yet to begin.
While Kasawari plays an important role in developing technical expertise, the broader focus is shifting towards infrastructure development in Peninsular Malaysia, especially near industrial zones such as the Malaysia-China Kuantan Industrial Park.
Other prospective sites under assessment include the Lawit gas field off Terengganu, and the Duyong gas field and Penyu basin near the Pahang coast.
PETRONAS carbon capture and storage head Nor A'in Md Salleh shared that five to seven CCS sites across Malaysia are in varying stages of evaluation.
'The total assessed storage capacity currently stands at around 2.4 billion tonnes,' she said, noting that future assessments may increase that figure as more geological data becomes available.
Growth potential
PETRONAS sees CCS as a new service line within its broader portfolio, offering decarbonisation solutions for regional industrial emitters.
'Our infrastructure is designed to support industries in Malaysia and neighbouring countries that have declared ambitious net-zero targets,' Emry said.
He explained that PETRONAS is actively engaging with emitters in Singapore and South Korea, while also exploring collaboration opportunities with Japan, which aims to capture between 120 and 240 tonnes of CO2 annually by 2050 as part of its decarbonisation efforts.
'With the right infrastructure in place, Malaysia could attract industries producing low-carbon products such as blue ammonia and blue hydrogen, both of which rely on CCS to manage their carbon footprints,' Emry added.
'This is not just about PETRONAS. It is about building a broader ecosystem that enables real climate action, both locally and regionally,' he said.
In line with this, PETRONAS is partnering with Mitsui OSK Lines and MISC Berhad to develop what could become the world's first large-scale liquefied CO2 transport vessel, enabling cross-border shipment of captured carbon.
Current vessel sizes remain limited, and this development is seen as critical to scale-up.
The company has completed front-end engineering design for the vessel, and subsequent development phases are expected to proceed smoothly.
Meanwhile, the company's strategy, planning and commercial, carbon management head Faizah Ramlee said the Japanese government has selected Malaysia as a storage destination for captured CO2 emissions from Japan, reflecting an ongoing collaboration between Malaysia, Japan and other partners.
'Our partners are also on board to secure customers that we'll be servicing with carbon capture and storage solutions, and we are also working closely with our LNG marketers to support their customers who are looking for carbon capture solutions.'
Addressing high costs and market readiness
While interest in CCS is growing, Emry acknowledged that economic viability remains a significant challenge, especially at the capture stage.
'The capture process is expensive, and industries may find it hard to absorb these costs without regulatory incentives or clear market signals,' he said.
'Unless there's a price differential or regulatory push, widespread adoption will remain limited.'
To overcome these barriers, PETRONAS is working on cost optimisation through fit-for-purpose and standardised infrastructure, as well as economies of scale.
Although it will not be directly implementing capture technology for industrial users, the company plans to provide technical guidance and best practices.
Emry said PETRONAS aims to support industrial emitters by sharing insights on efficient capture technologies and emphasised the importance of aligning capture efforts with storage readiness timelines.
'The start of our CCS operations depends heavily on the readiness of industrial partners to align their capture efforts with our storage infrastructure rollout.'
Regulatory landscape and safety
Malaysia's legal framework for CCS is evolving. Emry noted that while the Petroleum Development Act 1974 currently governs storage in depleted fields, additional regulations are needed to address CO2 capture from non-oil and gas sources and cross-border transport.
He added that the recent passage of a Carbon Capture, Utilisation and Storage (CCUS) Bill 2025 by Parliament, pending gazettement, will help formalise oversight and establish a dedicated authority to regulate the CCS industry in Malaysia.
Preparing for all eventualities
Environmental safety is central to PETRONAS' CCS strategy. The company has drawn lessons from pioneering CCS projects in Norway, such as Sleipner and Northern Lights, to inform its approach to risk mitigation.
'We have used insights from these projects to guide our environmental impact assessment,' Nor A'in said.
PETRONAS evaluates four main criteria when selecting sites: the presence of impermeable cap rocks, injectivity, reservoir safety and minimum storage depth.
'We've set a minimum depth of 1,000 metres for all sites. Even in the unlikely event of a small leak, the impact would be negligible at that depth,' she explained.
Building for a low-carbon future
While energy supply remains PETRONAS' core business, CCS is being developed as a commercially viable solution to support industries, particularly in hard-to-abate sectors.
'CCS is one of the essential tools for industrial decarbonisation and a sustainable energy future in the region,' Emry said.
He added that broader adoption depends on ecosystem readiness, including industrial emitters, supportive regulations, and shared infrastructure, and that Malaysia's geological advantages combined with PETRONAS' offshore expertise provide a solid foundation for progress.