Kelington, Petronas to explore carbon capture technologies
The collaboration will explore joint value propositions through a feasibility study leveraging Ace Gases' expertise in carbon dioxide (CO₂) logistics and facility operations.
This MoU will be valid for one year, with an option to extend for an additional year, subject to mutual agreement. The collaboration will focus on identifying potential synergies and
opportunities in managing carbon emissions. The study will encompass the evaluation of
technologies, facilities, feasibility, commercial aspects, funding opportunities, and relevant industries.
Upon completion, it is anticipated that the study will provide a comprehensive assessment of the commercial and technical viability of developing joint value propositions in relation to the transport of carbon emissions. The findings may pave the way for potential future projects and collaborations between both parties, contributing to sustainable and innovative solutions for carbon management.
The collaboration comes at a time when Malaysia's annual CO₂ emissions from fossil fuel and industrial activities reached 288.82 million tonnes in 2023 (Source: Our World In Data). This feasibility study marks a critical step toward developing a national carbon capture scheme. If successfully implemented, it will provide CO₂ emitters with viable pathways to sequester carbon emissions, directly supporting Malaysia's Paris Agreement commitment to reduce carbon intensity by 45% by 2030 and achieve net-zero emissions by 2050.
Carbon sequestration is increasingly recognised as a solution for mitigating CO₂ emissions, particularly in hard-to-abate industries such as power generation, cement production, and oil and gas refining. The feasibility study will assess both the technical and commercial viability of deploying these solutions at scale.
Kelington, through Ace Gases, is already actively involved in carbon capture, as it currently owns and operates two CO₂ manufacturing plants. These facilities receive CO₂ from Petronas' gas processing plants in Kerteh, Terengganu, which is then purified and liquefied for reuse across various industries, with a particular focus on the food and beverage sector.
In parallel, Ace Gases is also exploring further utilisation pathways for the captured carbon, including the conversion of CO₂ into sustainable fuels such as green methanol, ammonia, and sustainable aviation fuel. These initiatives will further advance Malaysia's low-carbon transition and support the development of a circular carbon economy.
Kelington Group Berhad CEO Raymond Gan said, 'We believe that the shift towards a low-carbon economy presents not only a responsibility but an opportunity for innovation and growth. As we confront the urgent challenges posed by climate change, technologies like carbon capture and storage have emerged as a vital solution for reducing greenhouse gas emissions.'
'By leveraging Kelington's established capabilities in industrial gas processing and engineering services with Petronas CCS Solutions industry-leading insights and resources, we are well positioned to develop effective and scalable carbon capture solutions. These solutions can significantly mitigate emissions and offer transformative potential across industries.'
The collaboration aligns with Malaysia's National Energy Transition Roadmap, which outlines ambitious goals for achieving carbon neutrality by 2050.
'We are optimistic about the potential for collaboration on future projects with an industry leader like Petronas CCS Solutions. In line with the rising demand for low-carbon technologies, this collaboration will open new business opportunities, allow us to tap into diverse customer segments, and broaden our service offerings, paving the way for fresh revenue streams.'
With the Malaysian government's planned introduction of a carbon tax by 2026, targeting the iron, steel, and energy sectors, Kelington is well-positioned to help industries lower their carbon emissions, hence reducing their carbon tax obligations. By providing effective carbon management solutions, the Group will enable businesses to navigate future tax structures while actively supporting Malaysia's broader goals for decarbonization on a global scale. At this juncture, this collaboration is not expected to have any financial impact on Kelington's earnings and net assets. Nonetheless, the Group views this collaboration as a strategic step in advancing its capabilities and positioning for long-term growth in the evolving carbon
management sector.
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