The fast-paced energy transition demands innovative and breakthrough technological solutions and to help meet its complex challenges, companies around the world are turning to technologies that will help them accelerate achieving their carbon reduction ambitions while offering energy solutions that emit lower carbon.  

In taking deliberate steps to build a resilient and sustainable portfolio to support the transition towards low-to-zero carbon energy sources, in November 2020, PETRONAS became the first oil and gas company in Southeast Asia to declare its net zero carbon emissions by 2050 aspiration.  

Two years on, PETRONAS continues to progress in its journey towards a lower carbon future, and this year alone, its Upstream operations has successfully reduced 29 per cent of its greenhouse gas (GHG) emissions.  In expanding its lower carbon solutions, the company delivered two carbon neutral LNG cargoes to its client in China, in the first quarter of 2022. At downstream, business has further ventured into supplying sustainable aviation fuel as well as the providing charging facilities for electric vehicles (EV) at selected petrol stations.  

Taking this further, PETRONAS has established the Carbon Management Division (CMD) in early 2022, to pursue key low-carbon initiatives prioritising carbon dioxide (CO₂) management and development of Carbon Capture and Storage (CCS) business.  

“There are two parts to how we are doing it. First, we look at physical decarbonisation of our existing facilities through improving operational efficiency to cut down venting and flaring to reduce methane emission. Another team looks at CCS where we are not just managing Upstream’s CO₂, but the entire PETRONAS’ operations including Downstream and Gas businesses,” explains PETRONAS’ Head of Carbon Management Division, Emry Hisham Yusoff. 

For CCS, the division will be looking at managing storage readiness as well as the offerings for PETRONAS’ high CO₂ fields in Upstream. “We will then branch out and expand to offer CCS as the pathway of decarbonisation for industries in the region,” said Nora’in Md Salleh, Head of Carbon Capture and Storage at CMD.  

A Key to Achieving Net Zero Targets   

CCS technologies have been around for more than two decades but when the COVID-19 pandemic arrived, it led to an oil glut as well as soaring demands for cleaner energy, effectively accelerating the maturing of CCS technologies.  

PETRONAS made its foray into the carbon capture and storage value chain in 2004 with its PN-1TM   technology – a membrane that processes and removes a wide range of CO₂.  

And in 2010, PETRONAS began to monetise its fields with high CO₂ contents through the Tangga Barat project.  

With the first injection of CO₂ planned for the end of 2026, and once in operation, the CCS project at M1 field is expected to reduce an annual average of 3.3 million metric tonnes per annum (mtpa) of CO₂, making it one of the largest CCS projects in the world.

What will follow suit is PETRONAS’ focus on adding a new and steady revenue stream from its carbon storage business.

The Journey to Net Zero 

PETRONAS’ Carbon Management Division, will focus on accelerating the company’s decarbonisation efforts across its entire integrated value chain by managing what is likely to be a carbon storage portfolio for emissions produced from its operations. This unit will also potentially establish a regional storage hub for carbon emissions as a revenue generator.

PETRONAS Upstream has set a near-term target to be achieved by 2025. Collectively, it aims to reduce 11.6 million tCO_2e of emission from existing facilities, while developing CCS business through forming partnerships with solution providers as well as customers. Furthermore, it has set a target to achieve zero venting by 2024, and zero routine flaring by 2030.

PETRONAS has also developed a roadmap for its CCS journey. 

“For CCS of the high CO₂ fields in upstream, there is already an established road map as monetising these fields have been in our portfolio for a long time. We have been doing the first part of carbon capture at Upstream. The next part is to serve regional industry players who are interested to do CCS in Malaysia, which is part of our long-term strategy,” said Nora’in Md Salleh elaborating on CMD’s strategic targets.

The CCS project, which will be one of the largest in the world with a capability of capturing 3.5 million tonnes of carbon dioxide annually, can be scaled up during the second phase of development in the field.

CCS will be part of the solution to decarbonise the extraction of hydrocarbons and it is also one of the PETRONAS’ levers to achieve a net zero carbon emissions by 2050 aspiration.

Partnership Makes the Difference

So far, CMD has been active in creating new partnerships and strengthening existing ones, within industry and beyond-industry.

Since 2021, PETRONAS has teamed up with Sarawak Shell, ExxonMobil, Japan Petroleum Exploration Co. Ltd., POSCO International Corporation, Mitsu & Co, Korean consortium led by Samsung Engineering, DNV, and global shipping company Mitsui O.S.K. Lines to explore CCS opportunities. It is part of the efforts to leverage each other’s experience and knowledge along the CCS value chain.

In looking beyond the industry, PETRONAS is also exploring more partnerships with those in adjacent industries - such as Mitsubishi Corporation, Sumitomo Corporation, Linde, Air Products, Air Liquide, and Vopak.

“Capturing carbon alone is expensive with about USD30-USD40 per metric tonne.  To materialise all these, we have to look beyond exploration and production companies.”

In terms of advocacy efforts, CMD is currently engaging related Malaysian government ministries actively to make CCS a viable solution to global climate change effort.  

Safe and Efficient

The International Panel on Climate Change, include CCS as one of the ways the global community can achieve net zero carbon emissions by mid-century in a safe and effective manner. 

Malaysia has sufficient fields that are already identified for safe carbon storage to cater for domestic and regional emissions and the Malaysian Petroleum Management has identified an estimated 46 trillion cubic feet of potential carbon storage capacity across 16 depleted fields which surpasses Malaysia’s forecast of upstream CO₂ emissions.

The energy transition’s rapid changes are opening new doors for energy players to redefine their operations and offerings while committing to corrective climate actions, yet the transition should be addressed with just and responsible pathways. As the world is an eclectic community of peoples existing in heterogenous background, there really isn’t one solution that fits all.

Intensified decarbonisation and the scaling up of CCS is one PETRONAS multiple ways to provide emissions-abated fossil fuel as a sustainable choice because there are 800 million people worldwide who are still without access to energy.