Two players seeking to monetise gas potential from Malaysian offshore fields

Petronas Carigali (PCSB), a wholly-owned subsidiary of Malaysia’s state-owned energy giant Petronas, has entered into a heads of agreement (HOA) with JX Nippon for a cluster of fields located offshore Peninsular Malaysia.

The two companies entered into this agreement on 5 December 2022 to collaborate in developing a joint proposal to monetise the gas potential within the Bujang, Inas, Guling, Sepat and Tujoh (BIGST) fields, located offshore Kerteh, Terengganu.

Aidil Shabudin, Petronas’ Senior General Manager, Resource Development and Management, remarked: “The gas supply from BIGST fields is important for Peninsular Malaysia’s energy security given the significant potential that exists within the cluster. Carbon capture and storage (CCS) technology will be key solutions in monetising the fields since these fields contain high carbon dioxide (CO₂) and will be the first CCS project in Peninsular Malaysia.”

According to Petronas, the BIGST cluster will be the catalyst that is expected to spur the development of other high-contaminant fields in Peninsular Malaysia, which was not possible prior to this, due to the lack of complete CO₂ handling infrastructure.

The HOA deal was signed by PCSB’s Chief Executive Officer, Hasliza Othman, and JX Nippon’s Managing Director, Chief Representative in Malaysia, Yasuto Ariga. The signing ceremony was witnessed by Petronas’ Senior Vice President of Malaysia Petroleum Management (MPM), Mohamed Firouz Asnan and Senior General Manager, Resource Development and Management, MPM, Aidil Shabudin.

Petronas explained earlier this week that the BIGST opportunity was offered as part of the Malaysia Bid Round (MBR) 2020 and PCSB and JX Nippon were shortlisted based on the quality of their submissions and unique value propositions. The firm adds that the business value proposition by PCSB and JX Nippon will form the basis towards the negotiation of this cluster’s PSC.

“PCSB is expected to bring to the table its capability in developing CCS projects building on its recent experience on Kasawari CCS, which was sanctioned recently. Petronas would move closer towards its aspiration of achieving net-zero carbon emissions (NZCE) by 2050 through these carbon reduction solutions,” added Shabudin.

Petronas awarded an engineering, procurement, construction, installation and commissioning (EPCIC) contract in November 2022 to Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) for the Kasawari CCS project off the coast of Sarawak.

Regarding Petronas Carigali’s other activities, it is worth noting that the firm recently made a new oil and gas discovery in Block SK 306, offshore Malaysia.