Anglo-Dutch supermajor Shell is teaming up with Malaysian state-run giant Petronas to explore potential carbon capture and storage (CCS) opportunities in Malaysia.

Petronas confirmed on Tuesday that it had signed a joint study and collaboration agreement with Sarawak Shell to explore CCS opportunities and project collaborations.

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Under the agreement, the pair will carry out an integrated CCS Area Development Plan study covering selected areas off the coast of Sarawak.

The study will also see the companies explore providing decarbonisation services to Shell’s local and cross-border facilities, as well as to other potential regional customers.

Petronas said the outcome of the study will help “produce options in potential areas for further collaboration”.

Petronas’ upstream chief executive, Adif Zulkifli, said the agreement with Shell underscored the Malaysian company’s efforts to explore partnership opportunities in CCS.

“We are confident that this latest collaboration will inspire more innovation towards managing carbon emissions and advancing our shared ambition of delivering energy solutions in a responsible and sustainable manner,” he said.

“We will continue this trajectory to unlock opportunities which could potentially help reduce emissions and achieve our net zero carbon emissions aspirations.

“This is one of the many efforts to position and establish Malaysia as a leading CCS solutions hub in the region.”

Reducing emissions

The agreement with Shell follows a memorandum of understanding Petronas inked with South Korean companies Posco International Corporation and Posco Engineering & Construction last month to collaborate on potential CCS opportunities.

That agreement will also see the three companies work to identify suitable technology within the scope of carbon capture, transportation of carbon dioxide and storage for potential applications.

Petronas is already pursuing a CCS project as part of the second phase of development of its giant Kasawari field.

Upstream reported last month that the Malaysian operator had issued invitations to bid for the front-end engineering and design work for phase two of Kasawari, which will focus on capturing the field's carbon dioxide and injecting it into a nearby depleted offshore reservoir.

Petronas plans to commence the first injection of CO2 by the end of 2025 and, once operational, the project is expected to reduce CO2 volumes emitted via flaring by a total of 76 million tonnes over expected field life, with an annual average saving of 3.7 million tonnes per annum.

The final investment decision for Kasawari phase two is being targeted for later this year.

The pursuit of CCS, along with other emission reduction initiatives such as pursuing more zero continuous flaring and venting of hydrocarbons, form part of Petronas’ strategy to reach net zero emissions by 2050.