11 hours ago
- Business
- New Straits Times
Petronas ramps up carbon storage efforts to anchor Malaysia's low-emissions future
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is ramping up its carbon capture and storage (CCS) efforts, positioning the technology as both a key enabler of Malaysia's climate ambitions and a new economic frontier for attracting low-carbon investments and regional emitters.
Carbon management senior general manager Emry Hisham Yusoff said Petronas is developing multiple offshore storage sites and related infrastructure to transform Malaysia into a leading CCS hub for Southeast Asia.
Beyond addressing emissions from its own operations, he said Petronas sees CCS as a commercial solution to support decarbonisation across industries such as steel, cement and petrochemicals.
He added that CCS is central to the national oil company's long-term sustainability strategy and is being developed as a new line of business.
"CCS is not just about emissions reduction. It is a new service line and a commercial venture for us," he said at the Energy Asia 2025 media dialogue session here today.
"With the right infrastructure, Malaysia can attract low-carbon product manufacturers, such as blue ammonia and blue hydrogen producers, to set up operations here," he added.
Emry also highlighted that Malaysia's depleted oil and gas fields offer suitable geological formations for long-term CO2 storage, giving the country a strategic edge in regional decarbonisation.
"Petronas reduced its emissions from 59 million tonnes in 2019 to 46 million tonnes in 2023, with a target to cut at least 25 per cent of equity emissions by 2030 across both operated and non-operated assets.
"However, the pace of implementation depends on the readiness of industrial partners to align their timelines with Petronas' infrastructure rollouts," he said.
Petronas estimates that its investments in CCS projects will range between RM4.5 billion and RM5 billion, underscoring its commitment to building the necessary ecosystem for permanent CO2 storage.
Speaking at the same session, Petronas CCS carbon management division general manager Nor A'in Md Salleh said the company is focusing on the entire CCS value chain, including capture, transportation, onshore terminals and permanent offshore storage.
"We have identified five to seven potential CCS sites at different stages of development. Two are located in Peninsular Malaysia, including one within the Malaysia-China Kuantan Industrial Park, and one is in Sarawak," she said.
Among these, she added, the M1 site is the most advanced and will serve as the storage location for CO2 captured from the Kasawari gas field, a major natural gas development linked to Petronas' liquefied natural gas (LNG) portfolio.
Petronas is also constructing a dedicated onshore liquefied CO2 terminal in Kuantan to facilitate transportation and storage operations. Partner selection for this terminal is ongoing.
The CCS programme is closely tied to the company's LNG business, as Petronas is piloting CO2 capture directly from its LNG production facilities.
Emry said the commercial viability of decarbonised LNG remains limited in the absence of carbon pricing or market premiums.
"When we capture CO2 from our own LNG facilities, it becomes a cost to us – but there is no differentiated price for low-carbon LNG in the market. That makes it difficult to compete with others who are not pursuing decarbonisation," he said.
Looking ahead, Petronas is optimistic that frameworks such as Singapore's transition finance taxonomy, which now classifies CCS as a green activity, will improve access to sustainable financing.
"We have long said climate change knows no borders. Just because we store CO2 here does not mean Malaysia is the only beneficiary. We can enable emissions reduction across the region while securing our own energy future," said Emry.
Petronas is working closely with global partners such as TotalEnergies, Mitsui & Co, and a Japanese consortium comprising JGC Holdings and K Line, which are engaging emitters from Japan to collaborate on CCS storage in Malaysia.
This, Emry said, reflects strong cross-border interest and validates Malaysia's potential as a regional CCS destination.
In line with this, Petronas is also engaging with industrial emitters in Korea and Singapore that are seeking access to storage options in Malaysia to meet their respective national decarbonisation targets.
As part of its broader push towards net-zero carbon emissions by 2050, the company aims to launch CCS as a commercial service by late 2029 or early 2030.
"This is not just about Petronas. It is about building a broader ecosystem that enables real climate action – locally and regionally," Emry added.
