Petronas sees carbon capture as business potential

Company assessing feasibility of making a commercially viable business out of CCS

by AZREEN HANI / pic by MUHD AMIN NAHARUL

PETROLIAM Nasional Bhd (Petronas) is looking into the possibility of deploying more low carbon solutions in the long term, with a project on carbon capture and storage (CCS) on the horizon.

Petronas chief sustainability officer Charlotte Wolff-Bye told The Malaysian Reserve (TMR) that CCS presents the firm with the potential to solve the technical challenge it is facing with high CO2 assets and projects.

“Hydrocarbons per se are not the problem, but it is the emissions that we must address. In our sector, important means are improving energy efficiency, reducing flaring and venting, considering electrification of power supply and so on.

“Every credible scenario that refers to climate science and energy includes CCS as an essential practice in permanently removing CO2 and in decarbonising energy that stems from fossil fuels. So, CCS is an important tool in a bigger toolbox,” Wolff-Bye told TMR in an email response.

“At the same time, we are assessing the feasibility of making a commercially viable business out of CCS, where we would assist third parties in capturing and storing their emissions,” she added.

In November, Petronas signed a memorandum of understanding (MoU) with ExxonMobil Exploration and Production Malaysia Inc to jointly explore opportunities in CCS technologies to help decarbonise Malaysia’s upstream industry and provide CO2 storage solutions for the region.

Under the terms of the MoU, both parties will assess the viability of potential CCS projects in selected locations offshore Peninsular Malaysia and identify suitable technology within the scope of carbon capture, transport and storage for potential application.

Wolff-Bye further said that there are some interesting business models emerging both from the US and the North Sea that will provide insight on how the state oil firm can make CCS a viable opportunity in Malaysia and Asean.

“And the fact that the Malaysian government also recently announced its ambition to achieve a carbon-neutral nation by 2050, and to introduce carbon pricing, is building momentum to uncover solutions,” she said.

Petronas remains committed to achieving its net-zero carbon emissions aspiration by 2050, aligning with climate science to reduce emissions towards a 1.5°C future.

“We are making this commitment to make a positive change — not only to ride the energy transition — but because a fundamental shift is needed and the organisation wants to be part of the solution for the world that yearns for a path towards a more sustainable future.

“Fossil fuels are expected to remain at the core of the global energy mix for some time to come. Energy companies, and national oil and gas companies in particular, need to continue balancing energy affordability and security of supply with environmental sustainability,” she explained.

“We are leveraging our innovation and technology capability as a differentiator as we are developing sustainable solutions with long-term impact, these include carbon capture and storage and utilisation (CCUS), lower carbon fuels, hydrogen production, renewable energy generation, opportunities for low-wind turbines for our offshore energy solutions and advanced materials.”

Wolff-Bye said the company is testing various approaches to see what would work best for this region and what could create sustainable value for the business and the broader value chain in the long term.

“Metrics will follow once we have our plans in place,” she said when asked about Petronas’ metrics on carbon capture target.

“We’re carefully studying other existing and planned CCS projects around the world, both from engineering and economic perspectives. In Malaysia, we still need to continue our geological studies to ensure reservoir integrity.”

Petronas aims to utilise CCS for the Kasawari Phase 2 project on stream by end of 2025, with prospects for a second project in 2026.

According to Wolff-Bye, the Kasawari Phase 2 will have the capacity to store about four million tonnes of CO2 per annum.

“We are also elevating the discussion on CCS at national and regional levels, such as through the CEO Action Network, to raise awareness and to create momentum around CCS among key energy (players).”

“Stakeholders need to formulate clear policy asks on overall carbon market infrastructure and low carbon solutions like CCS to support the shaping of conducive public policy,” she added.