A group of Korean companies including SK and Samsung units will develop the cross-border value chain of carbon dioxide (CO2) capturing, transport and storage (CCS) business with Malaysian state-run oil company Petronas, the first of its kind in Asia.

Under a memorandum of understanding (MoU) signed by a group of six Korean companies and Petronas, the participating companies will develop the entire cycle across the CCS value chains from the discovery of local storage sites in Malaysia to capturing and transport of CO2 in Korea, according to the companies on Wednesday.

The so-called Shepherd CCS Project will capture CO2 emitted from industrial complex sources in Korea and then transport the captured CO2 to Malaysia to store it in the Southeast Asian country. This would be Asia’s first CCS hub project with a goal of developing the entire value chain at once.

The participating Korean firms are SK energy, SK earthon, Samsung Engineering, Samsung Heavy Industries, Lotte Chemical, and GS Energy. The Korean firms and Petronas will soon conduct feasibility studies on the development of the entire CCS value chains across borders.

The companies said economic feasibility can be improved in processing and transporting CO2 since the emissions from multiple companies can be treated at once. It is also expected to be effective in terms of national carbon management. The participating companies will explore business expansion through the participation of other Korean carbon-emitting companies in the future.

To expand the CCS industry, it is essential for Korean companies to secure enough storage space, and Malaysia is seen as an optimal location for CO2 storage, given its world-class storage capacity and geographical proximity to Korea.

“The initial area subject to this feasibility study is the location adjacent to the SK427 mine, where SK earthon recently acquired mining rights and this will be the first project to create synergy through the link between our strategic direction Upstream and the CCS project,” said Han Young-ju, Executive Vice President, Technical Center at SK earthon. “As securing a storage site is an essential element in completing the entire value chain, we will do our best to secure a storage site by utilizing the experience and technological capabilities we have accumulated over the past 40 years.

Han attended the MoU signing ceremony held at Petronas Twin Towers in Kuala Lumpur on Tuesday. It was also attended online and offline by Hong Jeong-eui, Executive Vice President, Energy Net Zero Office at SK energy; Park In-chol, Vice President, Environment Management Division at Lotte Chemical; Lee Sung-hoon, Vice President, Hydrogen & New Business Division at GS Energy; and Adif Zulkifli, Chief Executive Officer, Upstream at Petronas.

“This collaboration will allow Petronas to work closely with Korean industry to develop an action plan for the transition to net-zero and the feasibility studies undertaken through this collaboration will identify suitable technologies for the CCS and transportation value chain, bringing Petronas closer towards establishing Malaysia as a leading regional CCS solutions hub,” said Emry Hisham, Petronas Head of Carbon Management.

By Park Yun-gu and Minu Kim

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