KUALA LUMPUR (July 24): Petroliam Nasional Bhd (Petronas), which is seeking to establish a carbon capture and storage (CCS) hub in Pahang, has inked a land rental agreement with Kuantan Port Consortium Sdn Bhd for the project.

The financial details of the deal and the exact location of the land were not disclosed. The agreement was signed by Petronas’ unit Petronas CCS Solutions Sdn Bhd (PCCSS), it said in a statement.

The hub, dubbed Southern Carbon Capture and Storage Hub, is expected to have its first injection by 2029, Petronas said. It will play a key role in reducing carbon emissions for “hard-to-abate industries, locally and internationally,” it added.

“As Malaysia rallies towards energy transition and net zero carbon emissions, the establishment of a CCS hub is timely, to provide a decarbonisation solution to industries such as steel, chemical, cement, power generation and petrochemical in Pahang,” said PCCSS chief executive officer Nora’in Md Salleh.

“This hub, with its abundant storage capacity, also serves to connect all industrial areas in the west of Peninsular Malaysia and the Asia Pacific that are embarking on decarbonisation,” she added.

The move enables knowledge transfer between Petronas and Kuantan Port, which has a strong track record in handling diverse cargo types, fostering regional trade growth, and implementing modern logistics solutions, Petronas said.

Petronas is in the midst of developing its first CCS project in the Kasawari gas field, offshore Sarawak, touted as one of the world’s largest offshore CCS facilities. The first injection of carbon dioxide there is planned for the end of 2026, Petronas said in February last year.

The national oil company has also tied up with the likes of ExxonMobil and Shell Malaysia to explore the development of other CCS projects and carbon sequestration hubs in the country, as it seeks to unlock Malaysia’s potential as a regional CCS solutions hub.

According to reports, Petronas has allocated 20% of its annual capital expenditure (capex) from 2022 to 2026 for its overall decarbonisation efforts.

The group “is advancing CCS as a key solution to address emissions from its operations and other industries within the Asia Pacific”, its statement said.

“Petronas continues to form strategic collaborations as part of its deliberate steps in building a resilient and sustainable portfolio, while accelerating its Net Zero Carbon Emission 2050 commitment pathway,” it added.