Petronas reports first gas at North Malay Basin phase 3 offshore Malaysia
Petronas on September 26 announced first gas from the third phase of the North Malay Basin gas field in block PM302, off the coast of Peninsular Malaysia, bringing total output to 400mn ft3/d.
The third-phase North Malay Basin project was awarded a positive final investment decision (FID) in 2019. It involves the addition of a new wellhead platform adding 100mn ft3/d to daily average production.
NMB phase 3 is operated by Hess Corp's local upstream unit, Hess E&P Malaysia, which owns a 50% operating stake, Petronas owning the remaining 50%.
Petronas's senior vice president of petroleum management, Mohamed Firouz Asnan, said the third phase launch demonstrated Hess's long-term commitment to North Malay "across industry cycles", underscoring its confidence in Malaysian upstream.
"Together, we have continued to develop the NMB project to unlock the full potential of the block. This is a major milestone for both partners, as the NMB Phase 3 project is key in sustaining peninsular Malaysia's gas supply amid rising demand," Asnan said.
"The close collaboration between block PM302 parties and their service providers in overcoming challenges during the pandemic delivered this successful completion, which reflects the overall resilience of the Malaysian upstream ecosystem."
The outlook for Malaysian upstream is strong in the medium term, with several project launches in its five-year horizon expected to bring more feedstock to its LNG export trains at the Bintulu LNG and Malaysia LNG projects.
According to a report published by Fitch in March, Petronas has several upstream gas investments earmarked out to 2025, substantially increasing LNG liquefaction supplies.
In recent times, Malaysia has struggled to feed enough gas from existing upstream projects, including the Pegaga offshore gas field, which suffered a production delay after mercury content was detected at the project.
Petronas was forced to defer or halt LNG cargoes to overseas buyers early this year, using a contractual exemption known as downward quantity tolerance, which enables reductions to its contracted LNG shipments without violating its supply agreement.
Pegaga's launch was pushed back to March once the mercury issue was discovered. Its output is anticipated to reach 5-6bn m3/yr at peak, to be supplied to Petronas' Bintulu LNG complex.
As Asia-Pacific's third-largest gas producer, Malaysia aims to protect its position as an LNG juggernaut, but must also satisfy rising electricity output at its gas-fired power stations. Under its "Upstream Ambition 2030" strategy, Petronas wants to boost Malaysian hydrocarbon output to 2mn barrels of oil equivalent/day, from around 1.8mn boe/d at present.