Petronas, TotalEnergies and Mitsui Form JV for Offshore CO2 Storage, First Injection Eyed for 2031

Malaysia's plan to become a regional carbon storage hub took another concrete step on Friday, 23 October. Petronas, through its wholly owned unit Petronas CCS Ventures Sdn Bhd, signed a joint venture agreement with TotalEnergies EP CCS Malaysia and Japan's Mitsui & Co to develop carbon dioxide storage areas offshore Peninsular Malaysia, according to reports by The Edge, the New Straits Times and The Business Times.

The storage areas are a central part of what Petronas calls the Southern Carbon Capture and Storage (CCS) Hub. The agreement was signed in Tokyo.

What the agreement covers

Based on the joint statement as reported, the key points are:

• First phase: mainly a depleted gas field offshore Peninsular Malaysia.
• Capacity: injection of up to five million tonnes of CO2 a year.
• Timeline: first injection targeted as early as 2031, subject to industry readiness.
• Structure: a framework to set up a dedicated joint venture company that will develop, commercialise and operate the storage area.
• Next milestone: the partners will work on technical and commercial readiness ahead of a final investment decision (FID).

How we got here

The deal builds on earlier agreements. In 2023 the three companies signed a CCS Development Agreement, which led to development studies and technical evaluations of possible storage sites. In 2025 they moved to a Key Principles Agreement that paved the way for front-end engineering and design work and the joint venture structure.

The Business Times reported that the partnership combines Petronas' subsurface infrastructure, TotalEnergies' CCS development experience and Mitsui's logistics and project investment skills. The hub is meant to take CO2 from both domestic and regional sources, including possible cross-border shipments, and to serve hard-to-abate industries that struggle to cut emissions in other ways.

In a separate interview with The Edge, TotalEnergies' Malaysia country chair Jerome Saniez said the related cross-border project, which would store CO2 from Japanese industrial clusters, is expected to reach its investment decision by the end of 2027.

"The project has enough visibility from the government of Malaysia, PETRONAS, the government of Japan and Mitsui to make it happen. We are confident about the progress." (Jerome Saniez, TotalEnergies, as quoted by The Edge)

What this means for Malaysian readers

For most small businesses, a CO2 storage field in the South China Sea feels far away, but the knock-on effects are closer than they look. Big projects like this need engineering, marine logistics, fabrication, inspection and support services, and the government has been pushing for more local SME participation in large investments. If your company already supplies the oil and gas sector, watch for vendor registration and tender news as the project heads toward an FID. More broadly, Malaysia positioning itself as a decarbonisation hub signals that carbon reporting will matter more for exporters and suppliers to large manufacturers. Starting to track your own energy use and emissions now is cheap insurance for when customers start asking.

Sources: The Edge via KLSE Screener, "PETRONAS, TotalEnergies and Mitsui ink deal for carbon storage areas in southern hub", The Business Times, "Petronas, TotalEnergies, Mitsui ink JV pact to develop Malaysia carbon storage sites" and The Edge, "TotalEnergies eyes 2027 decision on landmark Malaysia-Japan carbon link", 23 October 2026. Rewritten in our own words.