Petronas Eyes Terengganu Carbon Sinks

Malaysia's national oil and gas company has signed a memorandum of understanding (MoU) with Terengganu to enable the state's natural ecosystems to generate carbon credits.

"Under the MoU, both parties will collaborate to identify and assess potential sites across Terengganu for nature-based carbon projects that meet internationally recognized certification standards", Petroliam Nasional Bhd (Petronas) said in a press release.

"These projects are intended to generate high-quality carbon credits while delivering tangible benefits to local communities and supporting environmental conservation".

Terengganu State Secretary Mohd Azmi Mohamad Daham said, "Terengganu is blessed with diverse natural ecosystems that hold significant potential for nature-based solutions".

Petronas said, "Carbon credits generated through NbS [nature-based solutions] are integral for Petronas in addressing residual and hard-to-abate emissions, complementing its Net Zero Carbon Emissions by 2050 Pathway".

In other carbon capture activities, Petronas last year received regulatory approval for a permit to evaluate the potential of the Duyong field offshore Peninsular Malaysia.

"This is the first permit issued under the newly enacted Carbon Capture, Utilization and Storage Act [Act 870] (CCUS Act 2025) enforced on 1 October 2025, marking a historic milestone for Malaysia’s energy sector", Petronas said in a statement November 10, 2025.

The permit allows Petronas, Mitsui & Co Ltd and TotalEnergies SE to conduct "comprehensive offshore geological assessments" at Duyong, part of the planned offshore Southern CCS hub, under a "key principles agreement" (KPA) signed July 2025, Petronas said.

"The KPA enables PCCSV [Petronas CCS Ventures Sdn Bhd], TotalEnergies and Mitsui to lay the foundation for the front-end engineering design phase for the Duyong area", Petronas added. "This partnership paves the way for the first-of-its-kind integrated CCS solution for industries in the Asia Pacific region".

"The permit issuance marks a pivotal step in building Malaysia's carbon capture and storage industry, positioning the nation as a regional leader in cross-border CO2 collaboration and responsible energy transition", Petronas said.

In 2024 Petronas secured a land lease in Pahang state from Kuantan Port Consortium Sdn Bhd for the Southern CCS project.

"The hub is expected to have its first injection by 2029 and will play a key role in reducing carbon emissions for hard-to-abate industries locally and internationally", Petronas said in a statement July 24, 2024 announcing the land rental agreement.

Also in 2024 Petronas signed an agreement with Abu Dhabi National Oil Co PJSC and Storegga to collaborate on a potential CCS project with a capacity of at least five million metric tons per annum in Malaysia.

The "joint study and development agreement" will evaluate the capability of saline aquifers to store CO2 emissions, with a view to building a CCS facility in the Penyu Basin offshore Peninsular Malaysia, a joint statement said August 20, 2024.

To contact the author, email jov.onsat@rigzone.com