This picture taken on February 10, 2020 shows a view of the National Monument (Monas) in Jakarta. (PHOTO / AFP)

JAKARTA - Singapore has become the first country to sign a letter of intent with Indonesia on cross-border collaboration on capture and storage of carbon dioxide (CCS) following a new Indonesian law to allow it, the governments said on Thursday.

Indonesia, which sees potential to develop its upstream natural gas sector and CCS as part of the global transition to greener fuel, last month issued a presidential regulation allowing CCS operators to allocate 30 percent of their storage capacity for imported carbon dioxide (CO2).

Singapore and Indonesia will form a working group to seek a legally binding bilateral agreement on the cross-border transport and storage of CO2 between the neighboring countries

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Singapore and Indonesia will form a working group to seek a legally binding bilateral agreement on the cross-border transport and storage of CO2 between the neighboring countries, a joint statement on Thursday.

The outline deal marked "a significant milestone in our efforts towards sustainable development and environmental stewardship," Jodi Mahardi, Indonesia's deputy coordinating minister overseeing energy, told Reuters.

Indonesia is keen to become a hub for CO2 storage in the region.The government says the archipelago has over 400 gigatonnes of storage capacity in the form of depleted oil and gas reservoirs and saline aquifers.

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It also says, the country has 15 CCS and carbon capture, storage and utilisation projects in various stages of preparation with a combined investment of nearly $8 billion.