10/9/13 Malaysia Field Development Sector Keeps Busy

www.epmag.com/item/print/Malaysia-Field-Development-Sector-Busy_119547 1/3

Malaysia Field Development Sector Keeps Busy

By Steve Hamlen, Special to Hart EnergyJuly 26, 2013

State-owned Petronas is backing activity with a new unit that targets marginal and mature fields.

A number of new field development projects are pushing ahead offshore Malaysia, with some tenders reaching

the vital bidding stages.

All of this activity is backed by state-owned player Petronas setting up a new unit solely to tackle the country’sgrowing number of marginal and mature field development opportunities.

Recent contact awards

A joint venture between France’s Technip and Malaysia Marine & Heavy Engineering (MMHE) has awarded its

own subsidiary, Technip MHB Hull Engineering (TMH), a contract on the tension-leg platform (TLP) being builtfor Shell’s Malikai deepwater development project in Block G offshore Sabah, East Malaysia. Under the deal,

TMH will design a 12,000 metric tonne hull and mooring for the platform.

The hull will be built at MMHE’s Pasir Gudang yard in Johor, Malaysia, and is scheduled to be completed by

mid-2015. TMH is currently carrying out a series of wave basin tests to analyze the behavior of the TLP.

Shell and its partners made a final investment decision on the Malikai project earlier this year, which will see 17

wells drilled from the TLP.

JDA gas plans

SapuraKencana has won a US $180.7 million contract from Trans Thailand Malaysia (TTM) for new export

infrastructure to transport gas from the Malaysia-Thailand joint development area (JDA) to Peninsular Malaysia.

SapuraKencana faced competition from Japan’s Nippon Steel and an alliance between McDermott and TH

Heavy Engineering.

The engineering, procurement, construction, installation, and commissioning (EPCIC) contract covers a new riser

platform and around 70 km (43 miles) of pipelines, with work under the three-year deal due to start immediately

and set for completion in 1Q 2016. The platform will be built at SapuraKencana’s Lumut yard in Malaysia, with

offshore installation scheduled to start in the second half of 2014.

Malaysia’s state-owned Petronas is planning direct export of 300 MMcf/d (8.5 MMcm/d) of gas from the JDA:

180 MMcf/d (5.1 MMcm/d) from the Muda field and 120 MMcf/d (3.4 MMcm/d) from the Cakerawala field.

Aker’s Sarawak success

Norway’s Aker Solutions has won a $15 million contract from US player Murphy Oil to deliver as many as 24

sets of splitter wellhead systems to projects offshore Sarawak, Malaysia.

10/9/13 Malaysia Field Development Sector Keeps Busy

www.epmag.com/item/print/Malaysia-Field-Development-Sector-Busy_119547 2/3

The deal includes deliveries of ancillary equipment and services over three years and has a one-year extension

option. Surface wellheads are used on land-based and shallow water platforms for drilling and production

equipment. Murphy will use the equipment in Block SK 309/311 offshore Sarawak.

“This is the first major surface wellhead contract for Aker Solutions in Malaysia,” said Dave Hutchinson, head of

Aker's subsea operations in Asia.

Most of the equipment will be produced at Aker’s dedicated surface wellhead manufacturing facility in Batam in

Indonesia, while Aker’s Port Klang facility in Malaysia will produce the ‘Shear-Safe’ surface gate valve

actuators.

New Petronas unit

Petronas has set up a new wholly owned subsidiary, Vestigo Petroleum, to focus on developing small, marginal

and mature fields in Malaysia, as well as abroad.

“Vestigo aims to optimize production from clusters of small, marginal, and mature fields through operational,

technical, and cost effective methods, while its parent Petronas Carigali continues to explore and develop largerand more technically complex fields,” said Datuk Mohd Anuar Taib, president of Petronas Carigali.

“Vestigo will enable Petronas to pursue additional growth areas such as small, marginal and mature fields through

strategic partnerships with other industry players.”

Ongoing bidding contest

Petronas is also close to launching a FEED tender battle for the $1.5 billion multiplatform Sepat gas processingproject offshore Peninsular Malaysia.

In May, Petronas started the pre-qualification process for international oil field service players and will use this as

a basis to create a shortlist of at least three contenders to undertake the FEED studies at the same time.

Local content will be a consideration so some domestic players have forged alliances with the three frontrunners:Italy’s Saipem has joined forces and SapuraKencana Petroleum; France’s Technip is teaming up with Malaysian

Marine and Heavy Engineering; and US player McDermott and TH Heavy Engineering are jointly pursuing theworkload.

Some industry speculation has tipped the Saipem-SapuraKencana team as the favorite at this early stage, butthere is a long way to go before the award stage is reached and anybody could win the ultimate prize – because

the FEED winner also will be handed an EPCIC contract.

The planned Sepat gas platform also could be used as a hub facility for existing satellite fields, as well as anyfuture discoveries.

Phase 1 of the project will involve a central processing platform (CCP), equipped with an acid gas removal unit,

weighing more than 27,000 tonnes. The platform will come with a flare tower and will be bridge-linked to awellhead platform under Sepat. A second wellhead platform will also be tied into the hub platform via a 12-km

(7-mile) flowline.

10/9/13 Malaysia Field Development Sector Keeps Busy

www.epmag.com/item/print/Malaysia-Field-Development-Sector-Busy_119547 3/3

Future CCP demand

Malaysia’s investment research company AmResearch, commenting on Sepat, told domestic newspaper

Business Daily that “This development is not a surprise, as we had highlighted in past reports that there are up to10 CCPs – such as the Semarang, Bergading, Baronia, Bokor and Dulang – which are open for competition in

Malaysia over the next two to three years. We expect the Semarang CCP to be awarded soon toSapuraKencana.”

AmResearch noted that contract rollouts have accelerated after Malaysia’s 13th general election, with 2Q 2013

orders so far reaching $1.31 billion, compared to $705.4 million in 1Q 2013.

In the short to medium term, AmResearch said activity in the oil and gas sector will mainly come from the largerMalaysian projects, such as EOR projects and gas cluster developments in the North Malay basin, as well as in

Sabah and Sarawak, which are tied to the completion of the Bintulu LNG gas complex expansion in 2015.