Petronas to build Malaysia’s first nearshore floating liquefied natural gas facility

Petronas, Malaysia’s fully integrated oil and gas company, currently operates two floating liquefied natural gas (FLNG) facilities, the PFLNG SATU developed for the Kanowit gas field off the coast of Sarawak, and PFLNG Dua, located at the deepwater Rotan gas field. The combined liquefied natural gas (LNG) production of the two sites is 2.7 million tonnes per year.

Petronas has signed a Memorandum of Understanding (MoU) with Sabah Oil & Gas Development Corporation (SOGDC), a state government agency, to build the first nearshore FLNG facility in Malaysia. The initiative will deliver the largest floating LNG resource in the region, adding an additional 2 million tonnes to Petronas’ annual LNG production. The collaboration includes SOGDC support and commitment to assist Petronas in securing all necessary approvals, permits and/or utilities, said deputy chief minister and state industrial development minister, Datuk Joachim Gunsalam.

The new FLNG facility will be built at Sipitang Oil and Gas Industrial Park (SOGIP) in offshore Sabah, at an estimated cost of around MYR8.8bn (USD2.02bn). Petronas is targeting 2026 to commence production at the site, though, the project is subject to a final investment decision at the end of 2022.

The initiative is currently in the front-end engineering and design (FEED) stage. Two parallel FEED contracts were awarded in December 2021 to a consortium from Samsung Heavy Industries and Japan’s JGC; and the pairing of Italian contractor Saipem and China’s Hudong-Zhonghua Shipbuilding. The winning FEED contractor will be rolled over to the lucrative engineering, procurement, construction and commissioning phase.