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Petronas to develop marginal fields offshore Malaysia

Petronas calls for competitive FEED on Sepat project

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolSince 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_Angsi-CEOR_Project_mapIn 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:

Petronas_Sepat_Oil_field – 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.

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1 Comment to “Petronas to develop marginal fields offshore Malaysia”

  1. Good thing Malaysia have enough financial resources or else they will keep on importing Natural Gas and Crude oil.

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