This article first appeared in The Edge Malaysia Weekly on October 14, 2024 - October 20, 2024

A carbon capture and storage (CCS) venture by Petroliam Nasional Bhd (Petronas) and its foreign partners is advancing, with a Japanese consortium awarded the engineering design work for the project located in southern offshore Malaysia.

The eight-company consortium led by Mitsui & Co will carry out the design work for the integrated project that will see carbon dioxide (CO2) gas emitted in Japan recovered and transported by sea for storage off the southern coast of Peninsular Malaysia.

“The winning of the bid provides for the continuation of this work from FY2023,” Mitsui says in an Oct 10 statement.

The Japanese consortium includes four utility firms: Kansai Electric Power Co, Kyushu Electric Power Co, The Chugoku Electric Power Co, and Electric Power Development Co.

Chemical manufacturer Resonac Corp, petrochemical refiner Cosmo Oil Co and cement producer Mitsubishi UBE Cement Corp are also in the consortium that won the bid, following an invitation by the Japan Organization for Metals and Energy Security (JOGMEC) to bid.

Petronas, Mitsui and French energy company TotalEnergies signed an agreement to start joint development of the storage site in June 2023. The agreement covers evaluation of storage sites, identifying potential customers and establishing commercial and legal frameworks.

The trio of companies is racing to introduce the first integrated CCS for industries in Asia-Pacific.

At press time, Petronas, Mitsui and TotalEnergies had yet to reply to requests for comment from The Edge.

The project, located off southeast Peninsular Malaysia, utilises depleted fields and saline aquifers. It is designed to store about five million tonnes of CO2 per year, sourced from power plants, cement producers, chemical industries and oil refineries in the Kinki, Chugoku and Kyushu western regions of Japan.

The project involves close collaboration with Petronas and TotalEnergies to ensure permanent sequestration at offshore sites. The site is one of three in Malaysia identified by the state-owned JOGMEC.

The project comes as Japan has set a target to achieve carbon neutrality by 2050, an effort that involves reducing net greenhouse gas emissions to zero. To support the goal, JOGMEC aims to establish CCS projects by 2030.

Further, the aim is to develop not only domestic CCS projects but also those with overseas storage, mainly in Asia and Oceania, which might lead to decarbonisation throughout Asia-Pacific.

JOGMEC supports the technology through basic engineering design for the value chain and assessment of CO2 storage potential, including exploratory drilling, according to its website.

Nine role model projects were picked for Japanese advanced CCS projects, with two of the sites off Peninsular Malaysia and one off Sarawak.

The other site off Peninsular Malaysia is a collaboration between Mitsubishi Corp, ENEOS Corp and JX Nippon Oil & Gas Exploration Corp.

Located in the north, the project is expected to utilise depleted oil and gas fields, storing some three million tonnes of CO2 annually from steel plants, chemical plants and oil refineries in the Tokyo Bay area.

For the third CCS site, Petronas has signed a storage agreement with Japan Petroleum Exploration Co Ltd, JGC Holdings Corp and Kawasaki Kisen Kaisha Ltd to store up to 2.9 million tonnes of CO2 a year in the M3 depleted field.

Emission sources include steel plants, electric power plants and chemical plants in the Setouchi region transported through a combination of domestic and cross-border shipping and pipeline networks.

Malaysia has identified 16 depleted fields for safe carbon storage with a potential capacity of 46 trillion cu ft combined.

For its part, Petronas has been stepping up efforts to pursue CCS projects after it became the first oil and gas company in Southeast Asia to declare its ambition of achieving net-zero carbon emissions by 2050.

Since then, Petronas has picked the M1 field off Sarawak to store CO2 captured from the Kasawari field. If successful, the project would reduce an annual average of 3.3 million tonnes of CO2 and make it one of the largest such endeavours in the world.

The company has also collaborated with Shell, ExxonMobil, Japan Petroleum Exploration Co, Posco International, a South Korean consortium led by Samsung Engineering, DNV and Mitsui O.S.K. Lines to explore CCS opportunities.

In addition, Petronas has sought partnerships with companies in adjacent industries, including Mitsubishi Corp, Sumitomo Corp, Linde, Air Products, Air Liquide and Vopak.

Petronas made its foray into CCS as early as 2004 with its PN-1TM technology — a membrane that processes and removes a wide range of CO2.

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