KUALA LUMPUR: Petroliam Nasional Bhd (Petronas), TotalEnergies and Mitsui & Co Ltd have signed a joint venture agreement to develop offshore carbon dioxide (CO2) storage areas under Malaysia's Southern Carbon Capture and Storage (CCS) hub.
The first phase will have an injection capacity of up to five million tonnes annually, with the first injection targeted as early as 2031.
The first phase will primarily target a depleted gas field offshore Peninsular Malaysia, with the first CO2 injection targeted as early as 2031, subject to industry readiness.
Petronas' wholly-owned subsidiary Petronas CCS Ventures Sdn Bhd, TotalEnergies EP CCS Malaysia and Mitsui signed the agreement.
It establishes a framework to form a dedicated joint venture company to develop, commercialise and operate the carbon storage area.
The agreement follows a series of earlier milestones, including a Carbon Capture and Storage Development Agreement in 2023, which enabled the partners to conduct development studies and technical evaluations of potential storage sites.
In 2025, the parties signed a Key Principles Agreement, paving the way for front-end engineering and design activities and the establishment of the joint venture structure.
Petronas CCS chief executive officer Emry Hisham Yusoff said the latest agreement reflected the partners' commitment to advancing the project towards a final investment decision.
"By bringing together Petronas' subsurface expertise, with their global CCS experience, commercial and logistics capabilities, we are confident in maintaining this momentum towards achieving final investment decision (FID) in the near future while advancing Malaysia's ambition to become a leading regional CCS hub," he added.
The partners will focus on advancing the technical and commercial readiness of the initial storage project ahead of an FID.
The hub is intended to provide safe, reliable and long-term CO2 storage for hard-to-abate industries, including those facing greater challenges in reducing emissions.
It is being developed to receive CO2 from domestic and regional sources, including potential cross-border shipments, supporting industrial decarbonisation across the Asia-Pacific region.
The development also supports Malaysia's ambition to establish itself as a regional CCS hub, leveraging its offshore geological storage potential to serve industries seeking solutions to reduce their carbon emissions.
The agreement was signed in Tokyo on Oct 23.
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