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Petroliam Nasional Bhd. (Petronas) has signed a term sheet with Mitsui OSK Lines Ltd. (MOL) and MISC Bhd. for a potential joint venture (JV) that would advance the commercial-scale deployment of liquefied carbon dioxide (CO2) carriers.
The purpose of the planned entity is “to invest in developing and monetizing Liquefied Carbon Dioxide (LCO2) carriers for Carbon Capture and Storage (CCS) projects in Malaysia”, the national oil and gas company said in a recent press release.
Petronas would be part of the joint venture through its wholly-owned subsidiary Petronas CCS Ventures Sdn. Bhd., which signed the term sheet in a ceremony attended by executives of the partner companies. The term sheet lays out “key commercial terms to allow progress to the next stage”, the announcement said.
Petronas earlier said it has passed technical assessments by classification societies in Norway and the USA for LCO2 vessels it is developing with Mitsui and Shanghai Merchant Ship Design & Research Institute (SDARI).
Det Norsk Veritas AS approved a short-haul LCO2 carrier with a capacity of 494,405.33 cubic feet (14,000 cubic meters) and a long-haul LCO2 vessel that can hold up to 3.07 million cubic feet (87,000 cubic meters). “The other two AiPs [approvals in principle] from ABS [American Bureau of Shipping] are for an 87,000m3 LCO2 carrier with Dynamic Positioning System, and a 96,000m3 [3.39 million cubic feet] LCO2 FSO [floating storage offloading unit] for intermediate storage”, Petronas said in a news release June 28.
“The 14,000 m3 LCO2 carrier is presently the world’s largest design with AiP for medium temperature and medium pressure conditions, while the 87,000 m3 LCO2 carrier and 96,000m3 LCO2 FSO are presently the world’s largest designs with AiP for low temperature and low temperature conditions”.
“The AiPs indicate that the classification societies have reviewed and approved the basic design of the LCO2 carriers as well as the FSO, as they fulfill the technical requirements and safety criteria”, the company said.
MOL senior managing executive officer Nobuo Shiotsu said about the successful evaluation, “Development on a large scale is an essential step for the CCS value chain within the Asia Pacific and Oceania region”.
Commenting about the signing of the term sheet, Petronas executive vice-president and chief executive for upstream Datuk Adif Zulkifli said, “LCO2 carriers are integral to the CCS value chain to connect customers to carbon capture sites and storage locations”.
“Our partnership with MOL and MISC is a powerful synergy of multiple expertise, abundant resources, and shared values”, Zulkifli added.
Rajalingam Subramaniam, president and chief executive of shipping firm MISC, said, “Again, our call to the maritime and other hard-to-abate industries is to collaborate and do just for the betterment of communities”.
Petronas has said it aims to make Malaysia a regional leader in the CCS sector, in a region where the sector has only just been catching up.
A 2021 report by the International Energy Agency said Southeast Asia had yet to develop policies to facilitate investment in CCS. Most governments in the region have only recently recognized the value of the CCS sector in driving investment, Wood Mackenzie said in a report last year. But WoodMac painted an optimistic outlook on the potential of the sector in Asia-Pacific.
“In Wood Mackenzie’s AET-1.5 degree scenario [accelerated energy transition scenario], Asia Pacific accounts for some 50 percent of global CCUS capacity”, WoodMac said.
For Southeast Asia, estimates indicate carbon storage capacity could exceed the region’s needs, with depleting oil and gas reserves presenting wide-scale opportunities, according to the IEA report.
To contact the author, email jov.onsat@rigzone.com
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