SapuraOMV produces first gas from Larak field off Malaysia

Malaysia’s SapuraOMV Upstream has produced first gas from the Larak gas field offshore Malaysia following the start-up at the end of December.

SapuraOMV said on Monday that the first gas from Larak field, located in the SK408 production sharing contract (PSC), was delivered within budget.

The SK408 gas fields are part of discoveries made by SapuraOMV in a drilling campaign in 2014. The fields are tied back into an existing processing facility and gas is transported through existing pipelines for onward gas processing at Petronas LNG complex in Bintulu.

SapuraOMV’s partners under SK408 PSC are Sarawak Shell Berhad and Petronas Carigali with 30 percent stakes each.

According to the company, the development of SK408 aims to commercialize gas reserves from the Gorek, Larak and Bakong fields, which will help meet the growing gas demand in Asia.

Johann Pleininger, executive board member responsible for upstream and deputy chairman of OMV, added: “This production start is a positive signal and demonstrates OMV’s commitment to the Asia-Pacific hub. It shows once more the strengthening of the gas focus in our production portfolio.”

The SK408 development is SapuraOMV’s second major upstream gas development project in East Malaysia, following the successful development and commencement of production from the SK310 B15 gas field.

Following the full ramp-up of the first phase of SK408, comprising the Gorek, Larak, and Bakong fields, SapuraOMV’s production is expected to increase to more than 30 kboepd, with the majority being gas. The company’s ambition is to reach a production of 100 kboepd by exploration and M&A within the next six to seven years.

To remind, SapuraOMV took a final investment decision (FID) to develop the three fields as Phase 1 of the SK408 PSC in April 2018. The FID followed the field development plan approval from Petronas and concurrently, the signing of the key terms to the gas sales agreement for Phase 1 of the SK408 gas field development.

It is also worth noting that SapuraOMV and Shell’s Malaysian subsidiary reached agreements with Petronas in September 2019 for the sale of gas which would be produced from the SK408 development.

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