Baker Hughes and Petronas link to invest in clean tech in Malaysia

Energy technology company Baker Hughes and Malaysian oil and gas company Petronas will jointly explore business initiatives that could support the demands of Asia’s energy expansion and transition.

Under a memorandum of understanding, the partners will investigate the potential for developing sustainable energy outputs including carbon capture, utilisation and storage, as well as lubricants and biofuels for the turbomachinery supply chain.

The companies also plan to strengthen the local supply chain for liquefied natural gas services and will identify areas that could benefit from applying digital solutions, including artificial intelligence.

“[This partnership will drive] project delivery, decarbonisation, supply chain resilience, and technology adoption,” said Mohammed Yusri Mohamed Yusof, Senior Vice-President of Projects, Technology & Health, Safety, Security & Environment at Petronas.

Baker Hughes has also announced plans to build a full aeroderivative gas turbine module repair services facility in Malaysia.

“The setting up of an enhanced aeroderivative facility here is a positive development towards the region’s cleaner energy pursuit,” added Yusof.

This push has been hastened by Malaysia passing its CCUS Bill, which signalled a policy shift that supports large-scale carbon capture deployment across industrial sectors.

The legislation is part of the National Energy Transition Roadmap, which is aimed at assisting countries that adopt CCUS to lower their carbon emissions. Malaysia also brought in the CCUS Act, which establishes a legal framework for CCUS activities.

Based on research from the Global CCS Institute, Malaysia is estimated to hold 13.3 gigatonnes of CO2 storage capacity – a number that reportedly surpasses the country’s domestic needs.

Despite its promise, the technology has also sparked criticism from environmental groups, particularly around the safety of offshore CO2 storage and that it promotes further extraction of fossil fuels. There have also been suggestions that the bill was passed without sufficient scrutiny.

With the laws in place, the government established a dedicated agency, MyCCUS, to serve as the central authority for licensing, regulation and compliance of carbon capture projects in Malaysia. Again, though, some have raised concerns over its structure.

“The CCUS agency should be placed under a separate regulator to prevent conflict of interest and ensure balanced consideration of environmental governance,” said Kieran Li Nair, Senior Researcher at the Institute of Strategic and International Studies Malaysia.

As of July 2024, the pipeline of CCS projects in Malaysia was at 628, which was a 60% year-on-year increase, according to the Global Status of CCS 2024 report. While numbers vary, it is estimated that there are around ten CCUS project proposals at different stages.

Petronas itself has plans for three CCS hubs and two flagship projects, aiming for a total storage capacity of 15 million tonnes of CO2 per year by 2030.