■ SK Energy, SK Earthon, Samsung Engineering, Samsung Heavy Industry, Lotte Chemical, GS Energy, and PETRONAS (Malaysia) signed an MOU for Shepherd CCS Project on August 2^nd

■ CO₂ emitted in South Korea will be transported to Malaysia and injected/stored in ocean storages – The first case in Asia to develop the overall value chain of a CCS Hub Project

■ Each company to exert its own technology and expertise to contribute to response to global climate change crisis

On August 2^nd, six industry leaders in South Korea announced their partnership with the Malaysian national energy company PETRONAS to undertake a cross-border Carbon Capture and Storage (CCS) project.

The six South Korean companies are SK Energy, SK Earthon, Samsung Engineering, Samsung Heavy Industry, Lotte Chemical, and GS Energy. They signed a Memorandum of Understanding (MOU) with PETRONAS to jointly develop the Shepherd CCS Project, an international project between South Korea and Malaysia to capture, transport, and store carbon dioxide (CO₂).

The signing ceremony was held in Petronas Twin Towers, Kuala Lumpur, on August 2^nd. Officials have attended the ceremony online and in-person. The signatories of the MOU were Emry Hisham, Head of Carbon Management, PETRONAS; Hong Jeong-eui, Head of Net Zero Office, SK Energy; Han Young-ju, Head of E&P Tech. Center, SK Earthon; Park Cheon-hong, Head of Solution Business Division, Samsung Engineering; Kim Jin-mo, Head of Global Business Team, Samsung Heavy Industry; Lee Sung-hoon, Head of Hydrogen & New Business Division, GS Energy; and Park In-chol, Head of Environment Management Division, Lotte Chemical. The signing was witnessed by PETRONAS Executive Vice President and Chief Executive Officer of Upstream, Datuk Adif Zulkifli.

The project aims to capture CO₂ emitted from industrial complexes in South Korea and collect them in the domestic hub. Afterward, it will be transported to and stored in Malaysia. The participating companies will search for the local storages in Malaysia, and develop the complete CCS value chain that encompasses the process of capturing, transporting, and storing CO₂. The parties will undertake feasibility studies first, and then move on to developing stage.

This project is highly significant in that it develops the entire value chain simultaneously as Asia’s first CCS hub project. In order to meet the Korean Nationally Determined Contribution (NDC) and to ensure that companies will cut down the emission of harmful chemicals in their businesses, the capture and storage of CO₂ must be accomplished before 2030. This project is expected to be economically beneficial as the hub can comprehensively manage the CO₂ emitted by multiple companies. In addition, it will help South Korean government to manage carbon in a more efficient manner. In the future, the participating companies will seek ways to expand the project by encouraging other companies in the country to join the project.

Moreover, it is also notable that the industry leaders have crossed borders and partnered up to overcome the global climate change crisis together. Especially, the cooperation with PETRONAS will ensure a stable carbon storage space for the South Korean companies, as the Malaysian partner works on broad areas of development across the Asian continent. Due to the lack of adequate space for CO₂ storage within South Korea, it is imperative to secure storage sites outside its territory, and Malaysia stands out as the best option for its global storage capacity and its geographical accessibility with South Korea. In this project, Samsung Engineering will manage the business development as well as the hub. Meanwhile, Lotte Chemical, GS Energy, and SK Energy will handle the CO₂ capturing and the hub. Transportation shall be entrusted to Samsung Heavy Industry, while SK Earthon and PETRONAS will oversee the exploration, selection, and operation of the storage. Each company will exert its technology and expertise to cooperation with one another.

Hong Jeong-eui, Head of Net Zero Office, SK Energy, said, “CCS is becoming the requisite measure for achieving carbon neutrality across the globe. Moreover, the method of capturing the CO₂ from various sources and storing together (Hub & Cluster Method) is in the limelight, especially in Europe. The geographical difference in capturing location and storage is expected to vitalize international shipping and overseas storage. In line with this, we will make sure that the cross-border cooperation achieves success in every process of the value chain.”

Han Young-ju, Head of E&P Tech. Center, SK Earthon, shared, “The feasibility study will be conducted in the area near the SK427 block, of which we recently acquired the operatorship. This project marks the first for SK Earthon to link our Upstream strategy and CCS project and create a synergy effect. The acquirement of the storage is significant to the completion of the overall value chain. Thus, we will do our best to secure the storage by utilizing our over 40 years of experience and technological capabilities.”

Emry Hisham, Head of Carbon Management, PETRONAS, said that this cooperation enabled a close collaboration with South Korean companies in order to develop its action plan for Net-Zero. “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,” he added.

[Images]

(Photo) A photo to commemorate the MOU

– (From left) Head of Environment Management Division of Lotte Chemical Park In-chol, Head of Solution Business Division of Samsung Engineering Park Cheon-hong, PETRONAS Executive Vice President and Chief Executive Officer of Upstream Datuk Adif Zulkifli, Head of Carbon Management of PETRONAS Emry Hisham, Head of E&P Tech. Center of SK Earthon Han Young-ju and Head of Hydrogen & New Business Division of GS Energy Lee Sung-hoon.

– (From left side of the back screen) Head of Net Zero Office of SK Energy Hong Jeong-eui and Head of Global Business Team of Samsung Heavy Industry Kim Jin-mo.

(Graphic) Shepherd CCS Project Map for reference