KUALA LUMPUR (Dec 30): Shell New Ventures Malaysia Sdn Bhd (Shell Malaysia) and Petroliam Nasional Bhd (Petronas) are advancing their collaboration to jointly explore the development of carbon sequestration hubs in Malaysia.

Both parties signed a cooperation agreement earlier on Oct 12, 2022 to strengthen their commitment for joint exploration and appraisal of geological formations. The agreement builds on the joint study and collaboration agreement signed previously with Petronas last year, said Shell in a statement on Friday (Dec 30).

The agreement also entails the development and operation of potential carbon sequestration hubs offshore Sarawak for the provision of decarbonisation service to cross-border regional customers — including but not limited to Shell Group’s sourced molecules from Singapore and other global future opportunities — providing a mechanism for the joint deliberation of such potential projects.

“It is an important milestone in maturing carbon capture and storage (CCS) as a commercially scalable decarbonisation solution for industries in Malaysia and beyond. We look forward to advancing our collaboration with Petronas to jointly develop reliable, technology driven CCS solutions in Malaysia,” said Shell Malaysia chairman Datuk Ivan Tan.

Shell is aiming to become a net-zero emissions energy business by 2050. Shell’s CCS strategy is a key pillar of its climate target, which is to have access to at least 25 million tonnes a year of CCS capacity by 2035.

CCS is important for heavy industries, such as those that produce steel, cement or chemicals, or power stations that use hydrocarbons to generate electricity, where there are currently no scalable low-carbon alternatives.