OPINION: Petronas awarding parallel front-end engineering and design contracts for its Kasawari carbon capture and storage project offshore its native Malaysia serves as a timely reminder that the increasingly global decarbonisation drive is continuing to build momentum.

But it also highlights the ability of conventional oil and gas projects to continue to attract billions of dollars’ worth of capital expenditure, with demand for hydrocarbons looking set to prevail until at least 2050 and likely well beyond.

The Malaysian national oil company appears to be on track — as intended — to take the final investment decision later this year on Kasawari CCS (Kasawari phase two), which is being touted as the world’s largest offshore CCS project.

It aims to exploit a part of the reservoir with a higher carbon dioxide content at the under-development field offshore Sarawak.

Between 3.7 million and 4 million tonnes per annum of CO2 are expected to be captured from Kasawari with a total of 76 million tonnes being recovered over the project’s lifespan.

Thai player PTTEP and its partners Kufpec of Kuwait and Petronas Carigali are already advancing Malaysia’s second offshore CCS project — Lang Lebah — which will remove high concentrations of hydrogen sulphide as well as CO2.

Malaysia aims to establish itself as a regional CCS hub and plans to offer CO2 storage in depleted offshore reservoirs for projects and clients outside the nation.

Petronas’ Malaysia Petroleum Management (MPM) has identified upwards of an estimated 46 trillion cubic feet of potential carbon storage capacity across 16 of Malaysia’s depleted fields, which is more than ample for the nation’s forecast upstream CO2 emissions.

Around 60% of this storage capacity will be allocated to Malaysia for Petronas and its partners, while the remaining 40% will be made available to other users, according to MPM senior vice president Mohamed Firouz Asnan.

Petronas has signed several agreements with other industry heavyweights including Anglo-Dutch supermajor Shell, South Korea’s Posco and Paris-based Technip Energies to explore CCS and other decarbonisation initiatives.

The tie-up with Shell is to explore CCS opportunities in Malaysia where the duo will perform 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.

Meanwhile, Petronas and Technip Energies will together further the commercialisation of carbon capture technologies to accelerate the transition to a net-zero carbon economy through developing such technologies and equipment to help operators reduce emissions.

Also, the trio of Posco International, Posco Engineering & Construction and Petronas plan to assess opportunities to unlock CCS potential and identify suitable technology within the scope of carbon capture, the transportation of CO2 and its storage.

Yet against this backdrop, the MPM is forging ahead with Malaysia’s latest licensing round — MBR 2022 — comprising exploration acreage, discovered fields ripe for exploitation, and producing assets with the aim of attracting fresh investment in its E&P sector.

More details of MBR 2022 were due to be revealed on Wednesday as Upstream went to press, but what is clear is that Malaysia and Petronas view oil and gas projects as a continuing part of their decarbonisation drive.

Hydrocarbons will play an important role during the global energy transition. Let’s hope that related pollution can be kept to a minimum too.

(This is an Upstream opinion article.)