Across the seabed off Borneo and the shores of Java, a new generation of steel pipelines is taking shape—not to move oil or natural gas, but to carry captured carbon dioxide (CO2) deep underground for permanent storage.

These subsea arteries, some stretching more than 100 kilometers, form the backbone of an intensifying contest between Malaysia and Indonesia to become Southeast Asia’s premier CO2 storage hub.

As countries across East Asia look for practical ways to decarbonize high-emission industries, Malaysia and Indonesia are already leading the way in Carbon Capture and Storage (CCS).

As a result, the burgeoning CCS industry is already attracting industrial emitters from Japan, South Korea and Singapore that lack suitable geology of their own.

Malaysia Advances Flagship Offshore Projects

State oil companies Petronas and Pertamina sit at the center. Petronas is advancing the Kasawari project, one of the world’s largest planned offshore carbon capture and storage (CCS) facilities.

High-CO2 gas from the field is processed, with captured carbon planned for transport via a dedicated 138-kilometer, 16-inch subsea pipeline to the depleted M1 reservoir for permanent injection.

According to the project’s details, the scheme targets 3.3 million tonnes per year.

After gas production began in 2024, Petronas has pushed to accelerate first injection toward 2027, earlier than previous 2029–2030 estimates, to close the gap between emissions and sequestration.

A parallel effort centers on the Duyong field off Peninsular Malaysia.

Petronas, TotalEnergies and Mitsui are developing a Southern CCS hub intended to receive liquefied CO2 shipped from Japanese industrial clusters—up to 5 million tonnes annually—before injection.

Front-end engineering is under way following Malaysia’s first offshore CCS assessment permit under the new CCUS Act 2025.

Final investment decision is targeted for late 2027, with operations eyed for the end of the decade. Supporting vessels for large-scale liquefied CO2 transport are also in development.

Indonesia Builds Toward Multi-User Hubs

Just like Malaysia, Indonesia is moving on a comparable track. Pertamina Hulu Energi and ExxonMobil are advancing the Sunda Asri CCS hub offshore West Java.

The concept includes liquid CO2 shipping, an onshore import terminal, a 180-kilometer pipeline and offshore wells into a saline aquifer with estimated multi-gigatonne capacity.

First injection is targeted at 2.5 million tonnes per year by 2030, with a planned mix of domestic and international volumes.

Indonesia’s regulations explicitly allow up to 30 percent of storage capacity for imported CO2, positioning the country as a regional sink.

Separate projects, including BP’s Tangguh CCUS component, further expand the pipeline of activity.

Cross-Border Demand Fuels the Competition

Singapore, constrained by limited domestic storage, is a key customer. Its S-Hub initiative aims to capture and export volumes, with potential links to both Malaysian and Indonesian sites.

Thailand’s PTTEP has also signaled interest through projects such as Lang Lebah, where CO2 would be piped offshore for injection.

Earlier industry discussions, including those covered by the Pipeline Technology Journal, framed the contest among Petronas, Pertamina and PTTEP as a scramble to establish Asian carbon storage hubs amid net-zero pressures.

Pipelines as the Connective Tissue

Pipelines form the critical connective tissue. While long-distance shipping dominates cross-border flows, once CO2 reaches receiving terminals or platforms, dedicated subsea and onshore lines move it to injection sites.

Shared hubs promise economies of scale: multiple emitters feeding common transport and storage infrastructure lowers unit costs compared with isolated projects.

Analysts note that Southeast Asia’s combination of depleted oil and gas fields, saline aquifers and existing offshore expertise gives it cost advantages relative to other Asian options.

Regulatory Progress Meets Persistent Hurdles

Regulatory progress has accelerated the race, with Malaysia’s CCUS Act 2025 clarifying permitting, ownership and long-term liability for the peninsula.

Indonesia’s presidential regulation also enables transboundary CO2 and sets out storage licensing.

Both countries view the industry as an economic opportunity—Malaysia has projected hundreds of billions in potential value over decades—while helping hard-to-abate sectors and high-CO2 gas developments meet climate goals.

Challenges Remain Substantial

Capital costs are high, carbon pricing across the region is still developing, and cross-border legal frameworks for liability and monitoring are incomplete.

Critics also argue that focusing on storage for foreign emissions risks delaying deeper domestic decarbonization.

However, technical execution, from pipeline integrity in corrosive CO2 service to long-term containment monitoring, will determine credibility.

Meanwhile, the momentum is visible. Fabrication of platforms and pipelines is advancing, permits are being issued, and commercial models for multi-user transport and storage services are taking shape.

By the early 2030s, the first commercial volumes of imported CO2 could be flowing through Southeast Asian pipelines into permanent geological storage.

The winners of this infrastructure contest will not only capture revenue from regional emitters but also help define how Asia manages residual carbon emissions in the energy transition.

The pipes being laid today may become the arteries of a new carbon economy.