Korean Dream Team Engages in Transnational Cooperation

for Carbon Capture-Transport-Storage Project between Korea and Malaysia

█ Seven companies such as LOTTE Chemical, Samsung Engineering, Samsung Heavy Industries, GS Energy, SK Energy, SK Earthon,

    Petronas (Malaysia) signs MOU for development of the Shepherd CCS Project on the 2nd

█ CO₂ from Korea to be transported to Malaysia and injected and stored in a marine storage center…

First total value chain development case for CCS hub project in Asia

█ Expected to contribute to global climate crisis by taking advantage of each company’s technologies and expertise

Korea’s top industrial leaders will collaborate with Malaysia’s national energy company Petronas to engage in a CCS (Carbon Capture & Storage) project that transcends borders.

It was announced that seven companies such as LOTTE Chemical, Samsung Engineering, Samsung Heavy Industries, GS Energy, SK Energy, SK Earthon, and Petronas of Malaysia signed a memorandum of understanding to cooperate in the development of the Shepherd CCS Project, which is a carbon capture-transport-storage project between Korea and Malaysia.

This MOU signing ceremony was held at the Petronas Twin Tower in Kuala Lumpur, the capital of Malaysia on August 2. It was attended both online and offline by LOTTE Chemical Eco-friendly Management Sector Director Park In-cheol, Samsung Engineering Solutions Business Vice President Park Cheon-hong, Samsung Heavy Industries Global New Business Team Director Kim Jin-mo, GS Energy New Hydrogen Project Development Sector Director Lee Seung-hoon, SK Energy Energy Net-Zero Chief Hong Jung-ui, SK Earthon Tech Center Director Han Young-joo, and Petronas Upstream Sector President Adif Zulkifli, and Petronas Carbon Management Section Head Emry Hisham Yusoff.

This project involves capturing carbon dioxide generated at Korean industrial complexes, gathering them at a domestic hub, and then transporting and storing them in Malaysia. The participants will examine local storage centers in Malaysia and plan to develop a life-cycle for the CCS value chain ranging from domestic carbon capturing, transportation, and storage. The participants will first start off with a feasibility study, the verify its business value, and then proceed with the actual project development.

This project is significant in that it is Asia’s first CCS hub project and will develop the entire value chain at once. In order to achieve the nationally determined contributions (NDC) and reduce carbons for each company, actual carbon capture and storage must be accomplished before 2030. This project can treat carbon emitted by multiple companies simultaneously through the hub, thus making it possible to improve the economics for treatment, transport, etc., and it will also be efficient for carbon management at a national level. The participants will also search to expand the project through participation of other companies that emit carbons in Korea in the future.

Another point worth noticing is that companies that are leaders in their fields have teamed up and transcended borders to overcome the global climate crisis. In particular, by cooperating with Petronas, a state-owned corporation of Malaysia that is engage in wide-scaled development all around Asia, it is expected that they will procure a stable carbon storage space. Procuring an overseas storage area was essential due to the lack of space in Korea for storing carbon. When considering the world-class storage capacity of Malaysia and its geographical proximity to Korea, Malaysia is the best location. The companies participating in this project plan to cooperate based on their respective technologies and expertise (△project development supervisor and hub: Samsung Engineering △carbon capture and hub: LOTTE Chemical, GS Energy, SK Energy △transportation: Samsung Heavy Industries △storage location search and selection, operation: SK Earthon, Petronas).

LOTTE Chemical Eco-friendly Management Sector Director Park In-cheol stated, “It is expected that in addition to renewable energy, CCUS will play a crucial role for 2050 carbon neutrality. Through the cooperation with the companies possessing the top expertise in their respective fields, we will do our best to successfully pursue this CCS project and take a meaningful step towards achieving carbon neutrality.”

Samsung Engineering Solutions Business Vice President Park Cheon-hong commented, “I am pleased to be able to work together with the leaders of different industry sectors in this meaningful project for global carbon neutrality,” and added, “In addition to Petronas that we have built a partnership with through collaboration in multiple projects, we will successfully develop the project based on teamwork with participating companies.” He also declared his aspirations saying, “We will be reborn as a ‘Green Solution Provider’ by procuring technologies in the hydrogen and carbon neutrality sector, and continuing project development.”

Samsung Heavy Industries Global New Business Team Director Kim Jin-mo stated, “The Shepherd Project is a very important project that can help achieve the national greenhouse gas reduction goals,” and added, “As this is a global project, it is essential to procure carbon dioxide marine transportation methods, and therefore, we will closely cooperate with participating companies to contribute to the overall success of the project based on our capacities for building ships with stable carbon dioxide transportation abilities and EPC.”

GS Energy New Hydrogen Project Development Sector Director Lee Seung-hoon stated, “During the course of implementing carbon neutrality that our country is pursuing, this project will provide an opportunity to go beyond the Republic of Korea and grow in to a cross-border CCS project for Asia.” He further added, “I hope that this project is successfully developed using government cooperation and support of each nation as a platform, and we will do our best to contribute toward Korea’s goal for carbon neutrality by finding various global business opportunities in the future.”

SK Energy Energy Net-Zero Chief Hong Jung-ui said, “CCS has become an essential decarbonization plan for achieving global carbon neutrality, and it is drawing attention centering on Europe for its method of capturing and storing carbon from various emission sources (hub & cluster method),” and added, “As it is expected that international maritime transportation and overseas storage will become active due to the geographical differences of capturing sources and storage centers, we will successfully pursue the project based on collaboration with domestic and foreign participants in the entire value change encompassing capture, transportation and storage.” 

SK Earthon Tech Center Director Han Young-joo explained, “This area for feasibility study is near the SK427 block that SK Earthon recently acquired mining rights to, and it is the first project for creating synergy through SK Earthon’s strategic direction of upstream and CCS project linking,” while adding, “Procuring a storage center is an essential element for completing the total value chain, and we will do our best to procure the storage center using our experiences and technological capacities that we have accumulated over the past 40 years.”

Petronas Carbon Management Section Head Emry Hisham Yusoff commented, “Through this collaboration, Petronas is now able to closely cooperate with the Korean industry in order to develop execution plans for transitioning to net-zero (carbon neutrality),” while adding, “This feasibility study will help find the appropriate technologies for the CCS and transportation value chain, and help Malaysia become established as a leading CCS solution hub.”