Pertamina and ExxonMobil sign $2.5bn deal to develop CCS in Indonesia

Pertamina and ExxonMobil sign $2.5bn deal to develop CCS in Indonesia

Indonesian state-owned energy company Pertamina and ExxonMobil have signed a $2.5bn agreement to further assess the development of regional Carbon Capture and Sequestration Hub in Indonesia.

The partnership aims to fuel decarbonisation among refining, chemicals, cement, and steel sectors, thereby lowering carbon emissions while creating economic opportunities for Indonesian workers, and will help Indonesia achieve its Net Zero ambitions “in 2060 or sooner,” according to a White House statement.

Pertamina is working on six CCS/CCUS projects by selecting fields that can be used as carbon dioxide (CO2) injection sites. The six potential lands are located in various offshore areas from Sumatra, Java, Kalimantan, and Sulawesi.

A joint study by Pertamina and ExxonMobil found CO2 potential with a capacity of up to 1bn tonnes in Pertamina’s oil and gas fields. This large capacity can permanently store CO2 emissions throughout Indonesia at the current average for the next 16 years.

The discovery of the vast CO2 potential shows the turning point of Carbon Capture and Storage (CCS) business development and decarbonisation efforts in Indonesia.

The collaboration was marked by the signing of the Head of Agreement (HoA) by President Director of Pertamina, Nicke Widyawati, with President Asia Pacific ExxonMobil Low Carbon Solution and President ExxonMobil Indonesia, Irtiza Sayyed, in the presence of other officials.

It was also announced that the US International Development Finance Corporation will support HDF Energy’s investment in ‘Renewstable’, a portfolio of green hydrogen projects in Indonesia which combines renewable energy with battery and green hydrogen backed storage to deliver stable and reliable power to electricity grids.

Pertamina’s collaboration with Exxon is carried out through a joint study to see the potential for CO2 storage in saline formations in Pertamina’s working area.

The signing of the HoA is a follow-up to the Joint Study Agreement (JSA) signed in the United States on May 13. Through this strengthening of cooperation, Pertamina and ExxonMobil will finalise and prepare a commercial model design for a regional CCS hub development in PT Pertamina Hulu Energi OSES working area with the potential to store CO2 domestically and internationally.

Co-ordinating Minister for Maritime Affairs and Investment, Luhut Binsar Panjaitan, said the Indonesian government was working to develop regulations that support Carbon Capture & Storage (CCS) and started discussions with governments in other regions.

President Director of Pertamina, Nicke Widyawati, said the CCS development and decarbonisation cooperation follows Pertamina’s efforts to support the government’s program in accelerating the energy transition and emission reductions of 29% by 2030.

She said, “One of the selected fields has a vast capacity to store carbon dioxide. The technology implementation will prioritize resources in the domestic sphere, create job opportunities, and increase income for the country,” said Nicke.

“The development of CCS technology has a double impact, along with reducing emissions while increasing national oil and gas production.”

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