An Indonesian carbon capture and storage (CCS) project undertaken by Indonesian state-owned oil and gas company Pertamina and US energy giant ExxonMobil [XOM:US] is expected to cost USD500m, as reported by Reuters on November 8. Pertamina and ExxonMobil signed a memorandum of understanding (MoU) on November 2 at the UN COP26 summit to explore ways to deploy CCS in Indonesia, the largest country in Southeast Asia. Daniel Purba, senior vice president of corporate strategy at Pertamina, estimated that the USD500m in investment needed to construct the project does not include costs that would be incurred during CCS operation. Pertamina and ExxonMobil would need to construct a four-kilometers-long gas pipeline from the Gundih gas field and another 30-kilometers gas pipeline from the Sukowati oil field to a reservoir where collected carbon would be stored underground.
CCS is a process to capture carbon emissions from industrial activities that would otherwise be released into the atmosphere and inject them deep underground for permanent storage. Presently, CCS technology has not been widely commercialized. In February 2021, ExxonMobil set up a low-carbon solutions division to focus on the CCS business in Asia. Notably, the company expects over 300bn tons in storage capacity in Southeast Asia alone. On the other hand, Pertamina is targeting a reduction of carbon dioxide to 81.4m tons by 2060 in support of Indonesia’s net-zero ambition by 2060.