Since 2010, the national oil company (NOC), Petrolian Nasional Bhd (Petronas), has decided to put efforts to develop marginal fields offshore Malaysia.
Around the Malaysian peninsula, Petronas identified 106 marginal oil fields representing more than 580 million barrels of crude oil that it cannot ignore any longer.
These marginal oil fields are defined as to contain 30 million barrels maximum each.
But with crude oil around $100 per barrel, these marginal fields hold $58 billion worth of oil.
Petronas Malaysia Sepat Offshore FPSO History
In addition to this marginal fields exploration and production, the ongoing Economic Transformation Program is targeting to increase the crude oil recovery rate in Malaysia from the current 26% to 40% on the next 5 years with the help of intensive enhanced oil recovery (EOR) projects.
With the ambition to develop 25% of these marginal fields, Petronas decided to move on the Sepat and Beranta marginal oil fields in April 2011.
Contracted to Petrofac from UK, to provide Petronas with a converted floating, storage and offloading (FSO) vessel, Sepat started its first production of crude oil on first half 2012.
This Sepat field is located 130 kilometers from Kuala Terengganu and 80 kilometers from Dulang in the Block PM 313.
In parallel to this crude oil dedicated plan, Malaysia is also struggling to increase its natural gas resources since its consumption for power generation and the petrochemical industry is growing much faster than its current production.
For the time being, Malaysia is still a net exporter of gas but in the perspective of giant projects such as RAPID in Pengerang, Sohor, Malaysia is preparing to become a net importer by 2020 with the Pengerang LNG project.
In this context, Petronas has decided to speed up the development of the associated gas in marginal fields such as Sepat.
Until now, Petronas was reluctant to monetize the associated gas of the Sepat crude oil field as it contains 40% of carbone dioxide (CO2).
McDermott, Saipem, Technip compete on Sepat FEED
But Sepat is located is a prolific area of marginal fields supporting the concept to use Sepat as a hub to gather and treat the associated gas from number of these marginal fields lying around.
Based on this concept, the Sepat project should be developed in phases.
The first phase of the Sepat project should include:
- Central gas processing and acid gas removing platform with flare tower
- A first wellhead platform bridged to the central platform
- A second wellhead platform connected to the central platform by 12 kilometers flowlines
- Two gas export pipelines of 200 kilometers up to the Terengganu gas terminal
The second phase of the Sepat project will see the addition of:
- A third wellhead platform to be tied-back to the central platform through a 40 kilometers flowline
In order to speed up the implementation of the Sepat project, Petronas has decided to call for competitive front end engineering and design (FEED).
The principle of the competitive FEED is to convert the FEED contract, when completed, directly into the engineering, procurement and construction (EPC) contract.
As a result Petronas is saving the several months required to organize the bidding process of the EPC contract.
For this competitive FEED, Petronas qualified:
- McDermott from USA with the local THHE
- Saipem from Italy with the local SapuraKencana
- Technip Malaysia with the local Malaysian Marine Heavy Engineering
With $1.5 billion capital expenditure, Petronas expects the three bidders, McDermott, Saipem and Technip to submit their offers in March 2014 to start commercial operation in 2016.
December 2014
With the decision for this competitive FEED still pending the project will be delayed by one year.
March 2015
Petronas is delaying its $1 billion-plus domestic Sepat gas project in the light of the current low prices until 2017 or 2018.
Petronas is re-evaluating several different development concepts for Sepat, with options including a central processing platform or a floating production, storage and offloading vessel.
One or more wellhead platforms are expected to also be required for the full field development in Block PM 313 off Peninsular Malaysia.
January 2018
Project still on hold.
August 2020
After starting the early production with a mobile offshore production unit (MOPU), Petronas is gearing up in the project and awarded the water injection module to its subsidiary Uzma Engineering.
The larger part of the platform should be awarded in 2021.
August 2021
Project still on hold.
September 2021
Petronas is coming back to the original concept of FPSO to develop Sepat.
After turning around multiple options to develop Sepat, Petronas had given the priorities of offshore platforms and organized competitive FEED in that purpose
But this solution did not deliver the expected economical results and Petronas needs to move forward on this project to maintain its overall production.
Petronas awarded a new FEED contract to the local contractor MMC Oil&Gas to explore further the FPSO option.
This FEED work should be completed by the end of the year so that the EPC contract could be awarded on 2022.
Most likely the EPC contract should result from the conversion of the FEED work assuming this design to be conclusive.
September 2022
MMC Oil&Gas is still processing the FEED.
Petronas did not decide yet if EPC should be awarded to MMC Oil&Gas or open bid for next step.
December 2022
JX Nippon Oil & Gas Exploration Corporation (JX Nippon) enters the project.
This new partner should secure the project financing but should also delay the decision process.
December 2023
Project still at evaluation stage.
September 2024
Petronas decided to develop a FPSO instead of a platform.
The FPSO should produce up to 30,000 barrels per day (b/d) of oil.
The design of the FPSO could be based on the Aframax FPSO designed by Modec.
Petronas launches FPSO tender for which it plans to qualify mostly Malaysian shipyards, including:
- MISC
- Bumi Armada
- MTC, a subsidiary of HBA Future Energy
- T7 Global
Petronas could select the preferred bidder by the end of 2024, with EPC to start in 2025.
September 2025
After years of expectations, Petronas has decided to revive this high CO2-content Sepat project and confirmed to go for a FPSO concept instead of a platform.
The contenders remains about the same to lease this FPSO and were asked to review their commercial offer as of todays’ conditions:
- MISC from Malaysia
- MTC Group from Malaysia
- OceanStar Elite from Singapore
- T7 Global from Malaysia
The FPSO should be awarded on the end of 2025 or beginning of 2026.
February 2026
Petronas should award the EPC work to OceanStar Elite.
The FPSO specification should be as followed:
- 230 meters length
- 30,000 b/d of oil
March 2026
As expected, Petronas Sepat awarded the EPC to OceanStar Elite.
OceanStar Elite should replicate its OSE GH200 hull standardized design FPSO.
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