Carbon Capture and Storage (CCS) is a critical lever for achieving net-zero targets, particularly in hard-to-abate industries. Wider trends are also shaping CCS, such as the continued reliance on conventional energy, which requires CCS as a solution, and the shift towards lower-carbon products, which require CCS as a production enabler.
 
In late 2021, Petronas initiated a strategic effort to position Malaysia as a regional CCS hub. Malaysia is among the leading countries in Asia with geological sites suitable for carbon dioxide (CO2) storage, offering a strong foundation for scalable CCS development. The identified storage sites are located offshore, with the majority of reservoirs more than two kilometres below the seabed. This geological configuration provides enhanced environmental and public safety assurance, strengthening Malaysia’s attractiveness as a secure and responsible CCS destination. 
 
Malaysia is also situated outside the “Ring of Fire”, the 40,000-kilometre belt in the Pacific Ocean which contains up to 90% of the world’s active volcanoes and 90% of its earthquake areas. Thus, the storage sites are located in an area of negligible seismic/tectonic plate shift. 
 
Malaysia’s geographical location offers significant advantages for cross-border CCS, with strategic location for transporting CO2 from emitter countries to Malaysia. In recognition of this, Petronas has been actively advancing cross‑border CCS solutions since 2021, supporting regional countries with limited domestic geological storage capacity.

CCS hub development strategy 
The development strategy has been carefully curated to account for all aspects of the hub project, including risk, liability, and affordability, to ensure a smooth execution of the full CCS life cycle.
 
Petronas’ strategy involves focusing on three value chains: onshore gathering terminal infrastructure, including port facilities; transportation options to create the network to the hub, with a focus on liquefied CO2 vessels/ships; and, finally, storage sites. 
Petronas is also conducting a parallel assessment of multiple hub and storage locations to create optionality and support future development that can cater to higher demand. For each value chain, Petronas is partnering with industry players to fill any gaps in Petronas’ own capacity and capability. 
 
Today, Petronas expects to achieve FID for our Southern CCS Hub as early as 2027. The onshore terminal will be located within the vicinity of Kuantan Port in Pahang with two pipeline networks to offshore storage sites.
 
For long-haul ship transport, a new joint venture, Jules Nautica Sdn Bhd, was established in June 2025 with partners Mitsui OSK Line, MISC Berhad and Petronas CCS Venture Sdn. Bhd. This company will be responsible for building, owning and operating the liquified CO2 ship for the cross-border CCS market in this region. 

Offering an affordable solution  
Decarbonisation is an important cost for industry and requires affordable solutions. In Malaysia, in the absence of financial incentives such as those available in Europe, the UK or the US, Petronas has established a long-term multi-pronged strategy to ensure affordability. 

This includes the establishment of business risk profiles which robustly address liabilities, hazards and technical requirements at an early stage to achieve proper allocation of risk and liability along the value chain.

Petronas also focused on fit-for-purpose infrastructure precisely tailored for CO2 transportation and storage. 
 
It also worked on standardisation across the value chain, establishing a homogeneous CO2 spec to enable common receipt from diverse industries, allowing Petronas to build standardised infrastructure, achieving economies of scale and accelerated construction times.  

The next step in Malaysia’s energy transition will be the development of spin-off opportunities from CCS. This includes decarbonisation in the marine industry. Petronas is also exploring the Onboard Carbon Capture (OCC) whereby emissions captured from ships can be offloaded directly at the port and channelled to storage sites connected to the onshore CCS terminal. 
 
Here, companies like RINA can play an important role in the Environmental, Social, and Governance factors affecting the project, and by giving the technical advice needed to realise the OCC technology itself.
 
RINA can also play a key role in the independent verification, certification and risk assessment  of projects. Given CCS is a solution that offers the physical removal of CO2 from the atmosphere, it is critical to ensure and verify that Petronas’ own CCS infrastructure emissions are as low as possible. The methodology for calculating the molecule’s movement from sources to storage sites, including clarity on the risk-transfer points for cross-border activity, is also critical to securing the credibility of CCS as an effective decarbonisation solution.