ExxonMobil has signed a $2.5bn agreement with Indonesia’s state-owned energy company Pertamina to assess the development of a carbon capture and sequestration (CCS ) hub in Indonesia.

The heads of agreement (HoA), which is a follow-up to the joint study agreement (JSA) signed between the firms in May 2022, is expected to help in decarbonising Indonesia’s key industry sectors including the refining, chemicals, cement, and steel sectors.

In addition to reducing carbon emissions, the agreement is expected to help the Asian country in achieving its net-zero goals in 2060 or earlier.

Pertamina and ExxonMobil will finalise a commercial model design for the regional CCS hub development in the working area of ​​PT Pertamina Hulu Energi OSES , a subsidiary of Pertamina.

The firms carried out a joint study which revealed a potential carbon storage capacity of one billion tonnes in the Pertamina-operated oil and gas fields.

Pertamina main director Nicke Widyawati said: “One of these selected fields has a very large capacity to store carbon dioxide [CO₂]. The implementation of this technology will prioritise resources in the domestic sphere, creating jobs and increasing income for the country.”

“The development of CCS technology has a double impact, in addition to reducing emissions while increasing national oil and gas production.”

Pertamina said Indonesia’s emissions could be stored permanently at the fields for up to 16 years.

The Indonesian firm is working on six CCS/CCUS projects on potential fields, located in various offshore areas of Sumatra, Java, Kalimantan, and Sulawesi.

In a press statement, Pertamina said: “The discovery of the huge potential of CO₂ has become a bright spot for the development of the Carbon Capture and Storage (CCS) business and decarbonisation efforts in Indonesia.

“On this basis, Pertamina and ExxonMobil strengthen cooperation on CCS development, which is also carried out in the context of efforts to reduce carbon emissions while supporting economic growth through investment, job creation, and increased income for the state.”