Mubadala Energy and Indonesia’s Pertamina to explore carbon capture initiatives

Companies will also evaluate potential joint investments in upstream projects that seek to use the technology

Coal barges docked near a steam power plant in Jakarta. AFP

Mubadala Energy, the oil and gas unit of Abu Dhabi’s Mubadala Investment Company, and Indonesia’s Pertamina have signed an agreement to explore carbon capture initiatives in the South-East Asian country.

The agreement provides a framework to explore carbon capture, utilisation and storage (CCUS) projects for Pertamina’s and Mubadala Energy’s existing portfolio of assets in Indonesia, the companies said on Tuesday.

The companies will also look into potential joint investments in upstream projects that seek to use CCUS applications.

“With our track record as a responsible operator delivering reliable and safe operations, I believe we can harness both companies’ collective expertise to accelerate the deployment of potential CCUS technologies,” said Mansoor Al Hamed, chief executive of Mubadala Energy.

“And as the UAE prepares for Cop28, we are proud to be driving a strategic collaboration that aligns with the net-zero ambitions of both the UAE and Indonesia.”

Mubadala Energy and Pertamina signed an agreement to discuss, explore and potentially engage in energy transition initiatives, primarily focused on carbon capture, utilisation and storage applications in Indonesia.

Indonesia is planning to generate at least 51 per cent of its total energy from renewable sources by 2030.

The country also aims to become carbon neutral by 2060 or sooner, with renewable energy providing up to 85 per cent of the energy mix.

CCUS involves the trapping of carbon dioxide emissions from industrial activities such as steel and cement production, as well as from fossil-fuel combustion in power generation.

Subsequently, the captured carbon is transported either by ship or through pipelines and securely stored in subterranean geological formations.

Global CCUS uptake needs to expand 120 times from current levels by 2050, rising to at least 4.2 gigatonnes a year of carbon dioxide captured, for countries to achieve their net-zero commitments, according to McKinsey.

“With over six decades of experience in the energy industry, Pertamina has been integral to Indonesia’s growth story,” said Nicke Widyawati, chief executive of Pertamina.

“As the country continues to develop, the company is committed to decarbonisation goals and securing Indonesia’s energy requirements.”

Mubadala Energy has assets and operations spanning 11 countries, primarily in the Mena region, Russia and South-East Asia.

The company, which was previously known as Mubadala Petroleum, has been operating in Indonesia since 2004.

Last week, Mubadala Energy and Abu Dhabi’s clean energy company Masdar signed an agreement to explore opportunities related to decarbonisation and energy transition initiatives.

The partnership will primarily focus on the Mena region and South-East Asia while also exploring “other regions of mutual interest”, the companies said.

In February, Masdar invested in Pertamina Geothermal Energy, marking its entry into the country’s geothermal energy sector, the second largest after the US.

On Monday, Sharjah National Oil Corporation signed an initial agreement with Japan’s Sumitomo Corporation to explore a carbon capture project in the emirate.

The companies will conduct a feasibility study covering the entire carbon capture and storage value chain, including transport, storage, business models and assessment of regulatory aspects, the Sharjah oil company said.