KUALA LUMPUR (June 16): Petroliam Nasional Bhd (Petronas) sees its foray into carbon capture and storage (CCS) activities as a potential revenue-generating business, as the national oil company gradually ramps up to build an integrated CCS value chain.
Petronas executive vice-president and group chief financial officer Liza Mustapha said CCS could play a similar role in the company’s decarbonisation journey as floating liquefied natural gas (FLNG) once did in extending the commercial viability of Malaysia’s small or complex gas fields.
“We’re looking at CCS not as a standalone project, but as something that can complement and monetise high-CO₂ gas fields. Our Kasawari CCS project, for example, is aimed at enabling a high-CO₂ offshore field to be developed, where otherwise the resource would remain untapped,” she said during the leadership dialogue titled “The Great Capital Bottleneck: Aligning Value, Risk and Growth”.
According to Liza, the Kasawari CCS facility — currently under development off the coast of Sarawak — is one of the world’s largest offshore carbon storage projects. Its success, she said, could pave the way for CCS to become a topline contributor to Petronas in the future.
“The question is whether we can turn CCS from being an additional cost into a revenue earner. And if we can do it at Kasawari, then we’ll be one step closer to that outcome,” she added.
Her remarks echo earlier comments made by group president and CEO Tengku Datuk Muhammad Taufik at the same event, who described CCS as a “potential revenue stream”, in addition to being a climate solution.
“Just like our FLNG was embedded within the broader LNG value chain, CCS too must be linked to upstream and midstream segments to make commercial sense,” she added.
Petronas has long adopted a portfolio approach to capital allocation, Liza noted, weighing both tangible and intangible returns. In the case of CCS, the long-term benefits include enhanced energy security, extended field life and support for Malaysia’s net-zero ambitions.
“Malaysia has tremendous geological potential, with storage capacity of up to 10,000 million tonnes of CO₂ in depleted oil and gas reservoirs. Even after meeting domestic needs, there’s still room to offer CCS as a service to the region,” she said.
Still, Liza noted that despite growing interest in clean energy investments, there remains a mismatch between the risk profile of nascent technologies like CCS and the appetite of institutional capital.
“There’s always talk that there’s plenty of money out there, but many investors still don’t see it flowing in. What’s missing is a more deliberate matching of project risk, investor profile and investment structure,” she said.
“Our planning has never been based on prevailing oil prices. It’s always been about the fundamentals — supply, demand and sustainability of returns. That’s how we rank priorities and approve FIDs (final investment decisions),” Liza said.
Petronas has also begun limited oil price hedging — covering about 20% to 30% of its portfolio — as an “insurance policy” to protect investment continuity.
Meanwhile, the company continues to maintain a net cash position, which Liza said helps ensure that projects are not derailed by cyclical shocks.