JX Nippon Oil & Gas Exploration is teaming up with Malaysia’s Petronas on a natural gas project that tackles both energy security and environmental concerns.
The Japanese energy firm will split a 100 billion yen ($648 million) investment with the state-owned Petronas to develop a new gas field with challenging geological conditions. The field contains unusually high CO2 levels of over 10%, compared to typical concentrations of 3% to 5%.
Production is expected to start after 2026, targeting annual capacity of 4 million tonnes of LNG. This would mark a significant increase from JX’s current Malaysian output of 1.2 million tonnes per year. The project’s viability hinges on advanced CO2 removal and storage technology.
The venture aligns with JX’s pivot to Southeast Asia following its exit from North Sea operations in 2021. The company seeks to boost its global daily production to 100,000 barrels from 90,000 barrels, with additional investments planned in Papua New Guinea and Indonesia.
The gas will supply Southeast Asian markets and Japan, supporting the region’s transition from coal to cleaner energy sources while diversifying supply chains reshaped by Russia’s invasion of Ukraine.
