Joint development on carbon storage

KUCHING: Petroleum Sarawak Bhd or Petros and Petroliam Nasional Bhd (PETRONAS) are working on the development of a depleted oil field off the coast of Sarawak for storage of captured carbon dioxide (CO2) from an adjacent oil producing field.

A licence for this venture will be issued as soon as the new rules for carbon storage are gazetted in early 2023, according to Sarawak Premier Datuk Patinggi Abang Johari Tun Openg.

He said PETRONAS Carigali Sdn Bhd had reached the final investment decision for the development of the Kasawari CO2 Sequestration (CCS) project off Bintulu, which is expected to reduce CO2 volume emitted via flaring by 3.3 million tonnes of CO2 equivalent annually, making it one of the largest offshore CCS projects in the world.

“Sarawak, because of its stable geological formations, has the biggest carbon storage capacity in offshore areas. It is estimated that Sarawak has 30 trillion cubic metres of carbon storage capacity in the seabed of its continental shelf.

“The depleted or abandoned oil fields in offshore areas are suitable for development into sites for secured, permanent storage of CO2 captured by oil and gas companies that now have obligations to reduce emission of CO2 into the atmosphere.

“The captured and stored CO2 can be used for the making of hydrogen, blue ammonia, biofuels and other products, thereby providing a platform for the sustained development of carbon capture utilisation and storage (CCU) industry in Sarawak apart from the generation of carbon credits and a new source of revenue for Sarawak,” he added in his winding up speech on the Sarawak Budget 2023, which was approved by the state assembly last Thursday.

Johari said reputable companies in Singapore, South Korea and Japan had shown keen interest in participating and investing in CCU in Sarawak and in the transboundary transportation of captured CO2 from these countries for safe storage in offshore Sarawak.

The maiden regulated forest carbon project will commence in Sarawak in the first quarter of 2023.

“This initiative will be driven by the private sector entities with the technological know-how and financial resources to ensure the success and sustainability of the projects.”

The state assembly had earlier this year approved the amendments to the Forests Ordinance and Land Code to enable Sarawak to initiate activities which will reduce emission of greenhouse gases (CHG) to mitigate the effects of global warming.

Johari said the state cabinet would come up with rules to the amendments to regulate forest carbon activities, including afforestation and reforestation and the storage of CO2 and other CHG in offshore and onshore areas of Sarawak.

“The activities, which would be undertaken in accordance with protocols and the clean development mechanism formulated under the Kyoto and Paris Agreements on Climate Change, will yield tradable carbon credits and provide a new source of revenue for Sarawak.

“Under the forest carbon activities concept, after decades of logging for merchantable timbers, Sarawak will pursue a new direction in forestry management of preserving our trees, planting more trees, restoring and rejuvenating our logged over areas or degraded forests.“Licences for forest carbon projects, which will contribute towards reduction in carbon emissions, will be issued to regulate the establishment of such projects, which would be validated and verified by internationally accredited bodies for the issuance of carbon credits.

This will be traded under the voluntary carbon market mechanisms or in recognised international carbon credit exchanges,” he added.

Earlier this year, the Premier had said that the average carbon sequestration of tropical forests, such as forests in Sarawak, is approximately 11 tonnes of carbon dioxide equivalent per ha. Based on one million hectares of high-yield and sustainable industrial forest plantation (the target set by the state authorities to achieve by 2025), the target for carbon trading potential is about RM140mil to RM230mil, based on the current average price of carbon.This, according to Johari, is an immediately implementable initiative which represents only 10% of the forestry sector under Sarawak’s green economy initiatives.

On Sarawak’s plan to build a hydrogen production plant in Bintulu, Johari said the project is currently at the front-end-engineering design stage.

Upon commissioning, the plant is expected to produce 630,000 tonnes of green ammonia, 600,000 tonnes of blue ammonia and 222,000 tonnes of green hydrogen per annum, of which 7,000 tonnes will be for domestic use and the rest to be exported.

“This forms the base for the development of our hydrogen economy value chain in Sarawak,” said Johari.

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