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Southeast Asia Proves Fertile Ground for CCS

Copyright © 2021 Energy Intelligence Group
Carbon Capture: Pipe Dream

Carbon capture and storage (CCS) is gaining momentum in Southeast Asia as national oil companies and international oil companies pursue several projects.

Malaysia's Petronas, Indonesia's Pertamina, Thailand's PTT Exploration and Production (PTTEP), BP and Repsol, are all working on projects in the region.

But all of these projects are facing major hurdles because of inadequate regulatory and legal frameworks and the lack of a carbon price in both Indonesia and Malaysia.

CCS plays a key role in each company's carbon reduction strategies. All five companies have already set net-zero emissions targets or plan to do so in the near future.

The projects will also contribute to the national ambitions of Malaysia, Indonesia and Thailand to achieve net-zero emissions by 2050, 2060 and 2070-75, respectively.

In Singapore, Exxon Mobil is planning a CCS hub to capture, transport and store carbon dioxide generated by industrial activity across the Asia-Pacific region.

Indonesia

Indonesia is drafting regulations to accommodate CCS, which should allow Repsol to move forward with its Sakakemang project, Repsol Director of Exploration Mikel Erquiaga Aguirre told the First Asia CCUS Network Forum.

Indonesia is also discussing the introduction of a carbon tax of $5 per ton of CO2.

  • Sakakemang

Repsol plans to capture 2 million tons per year of CO2 over a 15-year period as part of plans to develop its Kali Berau Dalam onshore gas discovery. The field contains an estimated 2 trillion cubic feet of recoverable gas, but 26% of that gas is CO2.

Along with saline aquifers, two depleted gas fields — Gelam and Dayun — will be used to store CO2 as part of the Corridor production-sharing contract. A final investment decision is expected in 2022 with first CO2 injection slated for 2027.

Costs are estimated at $31/ton of CO2 and will be borne by operator Repsol (45%) and partners Petronas (45%) and Mitsui (10%).

  • Tangguh

BP plans to deploy CCS at its Tangguh LNG plant. The project involves sequestering 3 million tons/yr of CO2 from the Tangguh facility and the gas fields that supply it.

From 2026 CO2 will be injected into maturing assets as part of a wider plan to recover more gas from the fields.

  • Gundih

Pertamina launched a feasibility study earlier this year with several Japanese firms including J-Power for a small-scale CCS pilot project at the onshore Gundih gas field.

The study will run until February 2022. A front-end engineering and design phase is to be completed by 2024, with first CO2 injection due by 2026.

The Gundih field contains 21% CO2 which will be reinjected to increase gas production.

The stored CO2 will be certified as a carbon credit which will be shared by the governments of Indonesia and Japan.

  • Sukowati

Pertamina plans to inject 4,000 tons per day of CO2 from the Sukowati oil field as part of a CCS pilot project combined with enhanced oil recovery. First injection of CO2 is scheduled for 2028.

Malaysia

Malaysia is developing a regulatory framework for CCS which is due to be completed in 2022. The government has also announced its intention to introduce a carbon price.

  • Kasawari

Petronas is working on several CCS projects including one to store CO2 from the Kasawari gas field in the nearby M1 field from 2026.

The company plans to create clusters to share infrastructure and achieve economies of scale, with an eye to becoming a regional sequestration hub. This could generate new revenues for Malaysia and facilitate capture of CO2 from smaller sources.

However, more effective regulations will be needed for these ambitions to be realized.

  • Lang Lebah

PTTEP is considering using CCS as part of its Lang Lebah development.

Lang Lebah is PTTEP's largest-ever discovery with 2 Tcf-4 Tcf of gas resources, with a CO2 content of 13%.

Lang Lebah could be sanctioned by late 2022, with initial production of 600 million-800 million cubic feet per day.

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