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Murphy and Petronas to increase size of Malaysia Block H FLNG-2

Petronas FLNG-2 to require MEG additional module

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe El Dorado, Arkansas-based, Murphy Oil Corporation (Murphy) and the Malaysian national oil company Petronas are revising upward the design of their floating liquefied natural gas (FLNG) vessel for the development of the Block H, offshore Sabah in Malaysia.

Since 2007, Murphy accumulates natural gas discoveries in the Block H in beginning with the Rotan and Biris wells.

These new reserves are pretty important for Petronas since Malaysia is running short of gas

Murphy_Petronas_FLNG-2_Sabah_Malaysia_mapBecause of its fast growing economy and the development of its petrochemical industry, the consumption of natural gas is just about to boom in Malaysia.

This escalation may lead Malaysia to import natural gas already in 2015.

In that purpose Petronas is already working on import LNG terminal project and speeding up all opportunities to develop offshore natural gas fields with midsize FLNG vessels.

This FLNG concept fits perfectly with number of midsize gas fields lying offshore Malaysia such as Labuan or Block H.

In April 2012, Petronas made the final investment decision (FID) on its FLNG-1 currently under construction by the consortium Technip and Daewoo Shipbuilding and Marine Engineering (DSME), and to be installed at Labuan, offshore Sarawak.

Covering 1.40 million acres offshore Sabah, the Block H is shared between the partners in the a way:

 – Murphy 60%, the operator

 – Petronas 40%

JGC and Toyo in competitive FEED for Sabah FLNG-2

In order to speed up the development of this field, Murphy and Petronas have decided to organize a front end engineering and design (FEED) competition in order to save time in the additional bidding process for the engineering, procurement and construction (EPC) phase

JGC_Samsung_Floating_LNG_ProjectIn September 2012, two consortia led by Japanese companies were selected by Murphy and Petronas to participate to this competitive FEED:

 – JGC with Samsung Heavy Industries (SHI)

 – Toyo with Modec, CB&I, and IHI Shipbuilding

The team Samsung is benefiting from its success in building the first FLNG with Technip for Shell.

Toyo and its partners are proposing the LiBro FLNG concept developed jointly with Modec also from Japan.  

In this team, CB&I will bring its LNG expertise to design and build the topsides.

Both consortia were due to submit their costs estimates on mid 2013 for this 1.5 million t/y capacity FLNG.

Toyo_Modec_CB&I_IHI_Petronas_FLNG-2But in the meantime, Murphy and Petronas came back to the both team to integrate an additional module for the production of monoethylene glycol (MEG).

Estimated to 4,000 tonnes, this MEG module should represent 10% of the current topsides to weight 40,000 t/y.

As a result of this new module, the FLNG-2 should exceed 360 meters length and will require an extension of the deadline for the consortia to adjust their technical and commercial offer according to end of third quarter 2013.

With the capital expenditure running slightly above $1 billion, Murphy and Petronas expect anyway to award the EPC contract for the Sabah FLNG-2 in the Bloch H to the JGC or Toyo consortium before the end of 2013 for a production in 2016.

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