This article first appeared in The Edge Malaysia Weekly on April 13, 2026 - April 19, 2026

FRENCH energy giant TotalEnergies SE is moving closer to a final investment decision on its ambitious cross-border carbon capture and storage (CCS) project in Malaysia. The initiative, a joint venture with Petroliam Nasional Bhd (PETRONAS) and Japan-based Mitsui & Co Ltd, is expected to reach the sanctioning stage by end-2027.

The project is designed to capture five million tonnes per annum (mtpa) of carbon dioxide (CO) emitted by Japan’s industrial clusters. The CO will then be transported by sea and stored in the Duyong field, located off Terengganu. Operations are slated to begin by end-2030, TotalEnergies country chair for Malaysia Jerome Saniez tells The Edge in an interview.

“The final investment decision (FID) will be at the end of next year. The project has enough visibility from the government of Malaysia, PETRONAS, the government of Japan and Mitsui to make it happen. We are confident about the progress,” he says.

The FID will be a litmus test for the consortium’s ability to deliver Southeast Asia’s first integrated CCS value chain for third-party industrial emitters. The initiative has been in development since an agreement was inked between the parties in June 2023 to develop the storage site.

TotalEnergies and Mitsui each hold a 30% stake in the Duyong project, with PETRONAS holding the remainder. The project is currently one of four major CCS developments underway in Malaysia.

Of the other three developments, the most advanced is PETRONAS’ flagship Kasawari project, which focuses primarily on capturing upstream emissions. Its first injection is targeted for early 2027.

The other two are the Penyu project, owned by Abu Dhabi National Oil Co and UK-based carbon storage specialist Storegga Ltd, and the Lawit project, held by PETRONAS and ExxonMobil Exploration and Production Malaysia Inc.

Like Duyong, Penyu and Lawit are positioned as storage hubs for third-party industrial emitters. They came about as Japan, a long-standing partner of Malaysia in the oil and gas (O&G) sector, set a target for carbon neutrality by 2050. This goal is expected to require 120 to 240 mtpa in CO storage capacity.

Progress on Duyong remains aligned with internal timelines, Saniez confirms. A significant milestone was achieved recently, when PETRONAS CCS Ventures Sdn Bhd secured — under the new Carbon Capture, Utilisation and Storage (CCUS) Act — the country’s first CCUS permit. The Act came into force in August 2025.

“With this CCUS licence now, we are progressing well in terms of engineering and the detailed studies to be able to sanction the project. We have just started the front-end engineering and design, which is the last engineering part before we can take the FID and construct the project,” he says.

Interest from potential offtakers appears to be gaining momentum. Saniez says there has been strong interest from Japanese industrial players, with several letters of intent already signed.

“We are discussing with Singapore to secure enough emitters for this project. Now, we need to synchronise components of the project, the transport and injection, all along the chain,” he says, referring to the crucial middle and final steps that connect the capture of CO to its permanent secure storage.

An eight-company consortium led by Mitsui was awarded the engineering design work for the project in 2024.

Meanwhile, the supporting infrastructure is under development. In collaboration with its 51%-owned MISC Bhd (KL:MISC) and Mitsui OSK Lines Ltd, PETRONAS is developing the world’s first-of-its-kind large-scale liquefied CO vessel. It is also working on a terminal in Kuantan, Pahang, to handle the transport of CO from the pipelines to the vessels.

“All parties are bringing their technical expertise to the table and working hand in hand,” says Saniez.

Beyond carbon storage, TotalEnergies is aggressively expanding its renewable energy (RE) generation footprint in Malaysia. It recently signed a 21-year power purchase agreement (PPA) to supply 20mw of green energy to Google. This will be sourced from the 29.99mw Citra Energies solar plant in Kedah that is being developed via a joint venture with MK Land Holdings Bhd (KL:MKLAND).

Saniez describes the project as the “first building block” towards TotalEnergies’ target of 300mw of RE capacity in Malaysia by 2030. The target is part of the company’s global ambition to reach 100gw of RE capacity by the end of the decade.

TotalEnergies is currently looking at other “willing buyer, willing seller” RE projects in Malaysia, says Saniez. As to whether the company is exploring gas turbine power plants in Malaysia, he is tight-lipped. “I cannot comment. One step at a time.”

In the upstream sector, TotalEnergies remains focused on gas production. Since acquiring SapuraOMV in 2024, the group holds 30% operating interest in blocks SK408 and SK310 in Sarawak.

These blocks — with combined reserves of four trillion cu ft (Tcf) — account for 15% to 20% of the gross production delivered to Bintulu Port, Sarawak’s primary liquefied natural gas (LNG) port. Saniez says production is expected to be stable over the next two years.

The group is also developing four Tcf of gas reserves in blocks SK301b and SK313 in Sarawak, with production targeted for 2030. At the same time, it is drilling two oil exploration wells in Sabah.

Looking downstream, particularly regasification, Saniez says TotalEnergies is not keen to own regasification terminals in Malaysia. Instead, it aims to leverage its position as a global LNG supplier as Malaysia prepares to welcome more LNG into the country in the coming years.

“We are the second-largest LNG player in the world among international oil companies, and third overall globally. Maybe we could play a role in that area in the context of the deregulation of electricity prices in Peninsular Malaysia,” he adds. 

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