Malaysia has taken a major step towards establishing a domestic carbon capture and storage (CCS) industry, granting its first offshore assessment permit under a newly enacted legal framework. Petronas CCS Ventures (PCCSV), a wholly owned subsidiary of Petronas, received the permit from the Malaysia Carbon Capture, Utilisation and Storage (MyCCUS) Agency for the Duyong area offshore Peninsular Malaysia.
The authorisation, issued under the newly enacted Carbon Capture, Utilisation and Storage Act 2025, which took effect on 1 October 2025, grants PCCSV exclusive rights to conduct geological assessments in the Duyong field. The work forms part of the Southern CCS offshore hub, a multi-partner development led by Petronas and its partners aimed at establishing a large-scale CO2 storage network for industrial emitters across the region.
The permit allows Petronas and its partners TotalEnergies and Mitsui & Co to advance technical studies towards the front-end engineering design (FEED) stage. The collaboration is governed by a Key Principles Agreement signed in July 2025, building on earlier CCS development arrangements between the three companies dating back to 2023.
‘The granting of the Offshore Assessment Permit by the MyCCUS Agency represents a critical milestone for the Duyong CCS project,’ said Emry Hisham Yusoff, Chief Executive Officer of PCCSV. ‘This permit allows our collaboration with TotalEnergies and Mitsui to advance to the next phase of technical studies and evaluations, bringing us closer to realising Duyong’s potential as a safe and commercially viable carbon dioxide (CO2) storage site.’
Petronas stated that all activities will comply with the CCUS Act and its associated Offshore Permit and Licensing Regulations, ensuring alignment with national legislation and environmental safeguards. The company emphasised that the development supports Malaysia’s national goal of achieving net zero emissions by 2050 and aligns with its own corporate Net Zero by 2050 strategy.
The Duyong assessment evidences the operationalisation of Malaysia’s CCS legislation and enables the country to compete with neighbouring markets such as Australia and Indonesia, which are pursuing similar ambitions to become regional CO2 storage hubs. Petronas is seeking to leverage its experience in offshore engineering and gas infrastructure to capture a share of the growing Asian demand for CCS services.
Some commentators in Malaysia have cautioned that the CCUS Act was pushed through quickly and may not fully address the risks associated with large-scale carbon storage. The government and industry, however, maintain that regulatory clarity is essential to attract investment. The Duyong permit, as the first awarded under the new framework, will test the effectiveness of these provisions in practice.
Petronas described the development as a ‘pivotal step’ in establishing a viable CCS value chain in Malaysia, adding that it strengthens the company’s leadership in lower-carbon technologies. The project could also serve as a foundation for cross-border CO2 transport and storage agreements within the Asia Pacific region, as industrial emitters seek credible abatement pathways.
