Korean CCS Dream Team-Malay Sign Agreement on Carbon Capture, Transport, and Storage 'Shepherd Project'

SK Energy, SK Earthon, Samsung Engineering, Samsung Heavy Industries
Lotte Chemical, GS Energy, Petronas (Malaysia) and 7 Companies
Sign MOU for Shepherd CCS Project Development on 2nd

The joint cooperation ceremony for the development of the 'Shepherd CCS Project,' a carbon capture, transportation, and storage (CCS) business between Korea and Malaysia, was held on the 2nd at the Petronas Twin Towers in Kuala Lumpur, the capital of Malaysia. From the left in the photo, Park In-cheol, Executive Director of Eco-friendly Management Division at Lotte Chemical; Park Cheon-hong, Vice President and Head of Solution Business Division at Samsung Engineering; Adif Zulkifli, President of Upstream Division at Petronas; Emri Hisham Yusof, Head of Carbon Management Division; Han Young-joo, Tech Center Head at SK Earthon; Lee Seung-hoon, Executive Director and Head of Hydrogen New Business Development Division at GS Energy; and in the back screen from the left, Hong Jeong-ui, Head of Energy Net Zero Office at SK Energy; Kim Jin-mo, Executive Director and Head of Global New Business Team at Samsung Heavy Industries, are taking a commemorative photo. Photo by SK Innovation.

[Asia Economy Reporter Donghoon Jung] SK Energy, SK Earth On, Samsung Engineering, Samsung Heavy Industries, Lotte Chemical, GS Energy, and Malaysia's Petronas, among seven companies, announced that they have signed a memorandum of understanding (MOU) for joint cooperation in developing the 'Shepherd CCS Project,' a carbon capture, transport, and storage (CCS) business between Korea and Malaysia.

The signing ceremony took place on the 2nd at the Petronas Twin Towers in Kuala Lumpur, the capital of Malaysia. Attendees from each company participated both online and offline, including Hong Jeong-ui, Head of Energy Net Zero Office at SK Energy; Han Young-joo, Head of Tech Center at SK Earth On; Park Cheon-hong, Vice President and Head of Solution Business Division at Samsung Engineering; Kim Jin-mo, Executive Director and Head of Global New Business Team at Samsung Heavy Industries; Park In-cheol, Executive Director and Head of Eco-friendly Management Division at Lotte Chemical; Lee Seung-hoon, Executive Director and Head of Hydrogen New Business Development Division at GS Energy; Adif Julkipli, President of Upstream Division at Petronas; and Emri Hisham Yusof, Head of Carbon Management Business Division at Petronas.

Asia’s First CCU Hub Project... Korea-Malaysia Collaboration

This project involves capturing carbon dioxide generated from domestic industrial complexes, gathering it at a domestic hub, then transporting and storing it in Malaysia. The participating companies plan to develop the entire CCS value chain, from exploring storage sites in Malaysia to capturing, transporting, and storing carbon domestically. They will first begin a feasibility study to verify business viability and then proceed to full-scale project development.

This project is Asia’s first CCS hub project. It is significant because it develops the entire value chain simultaneously. To achieve national greenhouse gas reduction targets (NDC) and corporate carbon reduction goals, practical carbon capture and storage must be implemented before 2030. This project can process carbon emissions from multiple companies at once through the hub, enhancing economic efficiency in processing and transportation. It is also efficient from a national carbon management perspective. The participating companies plan to explore expanding the project by involving other domestic carbon-emitting companies in the future.

Moreover, it is noteworthy that leading companies in each sector have joined hands across borders to overcome the global climate crisis. In particular, by collaborating with Malaysia’s state-owned energy company Petronas, which is conducting extensive development across Asia, they aim to secure stable carbon storage space. Due to the shortage of domestic carbon storage space, securing overseas storage is essential, and Malaysia is an optimal location considering its world-class storage capacity and geographical proximity to Korea. In this project, each company will cooperate based on their technological expertise and specialization. Specifically, Samsung Engineering will participate as the project development lead and hub operator; SK Energy, Lotte Chemical, and GS Energy will handle carbon capture and hub operations; Samsung Heavy Industries will be responsible for transportation; and SK Earth On and Petronas will manage storage site exploration, selection, and operation.

Shepherd CCS Project Reference Diagram. Photo by SK Innovation

Securing Carbon Storage Space Essential in the Eco-friendly Era... Collecting Carbon for Bulk Storage in Malaysia

Hong Jeong-ui, Head of Energy Net Zero Office at SK Energy, stated, "CCS has established itself as an essential decarbonization solution for global carbon neutrality, and the method of capturing carbon from various emission sources and storing it together (hub & cluster method) is gaining attention, especially in Europe. As international shipping transport and overseas storage are expected to become active due to geographical differences between capture sites and storage locations, we will successfully advance the project through collaboration with domestic and international participants across the entire value chain of capture, transport, and storage."

Han Young-joo, Head of Tech Center at SK Earth On, said, "The area targeted for this feasibility study is adjacent to the SK427 block, which SK Earth On recently acquired exploration rights for. This is the first project to create synergy by linking SK Earth On’s strategic upstream operations (crude oil exploration and production) with the CCS business. Securing storage is an essential element to complete the entire value chain, and we will do our best to secure storage sites by leveraging our experience and technological capabilities accumulated over the past 40 years."

Park Cheon-hong, Vice President and Head of Solution Business Division at Samsung Engineering, expressed, "I am pleased to be working with leaders from various industrial sectors on this meaningful project for global carbon neutrality. Based on the teamwork developed through multiple project collaborations with Petronas, our partner, as well as other participating companies, we will successfully develop the project." He also stated, "We will continue to secure technologies and expand cooperation in hydrogen and carbon neutrality fields and business development to become a 'Green Solution Provider.'"

Kim Jin-mo, Executive Director and Head of Global New Business Team at Samsung Heavy Industries, said, "The Shepherd CCS Project is a very important project that can contribute to achieving national greenhouse gas reduction targets. As securing carbon dioxide maritime transport means is essential for this global project, we will closely cooperate with participating companies based on our shipbuilding and EPC (engineering, procurement, and construction) capabilities to contribute to the overall success of the project."

Park In-cheol, Executive Director and Head of Eco-friendly Management Division at Lotte Chemical, stated, "For carbon neutrality by 2050, CCS is expected to play an important role alongside the use of renewable energy. Through cooperation with companies possessing top expertise in each field, we will strive to successfully advance this CCS project and make it a meaningful step toward achieving carbon neutrality."

Lee Seung-hoon, Executive Director and Head of Hydrogen New Business Development Division at GS Energy, said, "This project can grow into a cross-border CCS business in Asia beyond Korea in the process of implementing Korea’s carbon neutrality. We hope the project will be successfully developed based on government-level cooperation and support from each country, and we will continue to strive to contribute to Korea’s carbon neutrality goals by discovering various global business opportunities."

Emri Hisham Yusof, Head of Carbon Management Business Division at Petronas, stated, "Through this cooperation, Petronas can closely collaborate with the Korean industrial sector to develop an execution plan for net-zero transition. This feasibility study will identify technologies suitable for the CCS and transport value chain and contribute to establishing Malaysia as a leading CCS solution hub."

This content was produced with the assistance of AI translation services.