More Gas Coming to Malaysian LNG

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--First gas from a field off the coast of Malaysia will support additional export volumes of liquified natural gas (LNG) from the Bintulu complex, companies said.

Shell plc's (NYSE:SHEL) (London, England) regional subsidiary, along with operator SapuraOMV Upstream and Petronas (Kuala Lumpur, Malaysia), announced first gas from the Jerun Field off the coast of Malaysia.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Plant Database can click here a list of detailed profiles of processing platforms and a metering station for the Jerun Field.

Gas from the field will move through a new, 50-mile pipeline connected to a production hub. From there, it will go to the Bintulu LNG facility for exports. The offshore platform for Jerun is designed for a peak production capacity of 15,000 barrels per day in condensate and another 550 million cubic feet per day in natural gas.

Zoe Yujnovich, the director of integrated gas and upstream for Shell, said first gas off Malaysia is an important part of the company's regional drive.

"Gas is an important fuel for Malaysia and the world, providing a secure form of energy for heating, cooling and power generation," she said in regards to the first gas from Jerun. "We are delighted the venture has reached this milestone."

Petronas, which shares a 60% stake in Jerun alongside a Shell subsidiary, added that the project would help address the growing appetite for super-cooled LNG.

"Adding to the country's energy portfolio, this project promises significant contributions toward sustaining Malaysia's long term gas supply," said Bacho Pilong, the company's senior vice president for Malaysia.

Malaysia is among the largest oil and gas producers in the Asia-Pacific, boasting proved reserves of 8.2 billion barrels of oil equivalent, of which 80% is in natural gas. Those reserves can help address regional energy demand that's increased about 3% annually over the last 20 years, the International Energy Agency (IEA) said.

The IEA said it expects the region will be a net importer of natural gas by next year, adding Russia's invasion of Ukraine in 2022 has led to "profound" disruptions in the energy market.

"The market turbulence has shone a spotlight on the energy security vulnerabilities of Southeast Asian countries and their mechanisms in place to weather supply disruptions," its annual regional report said.

Major energy companies such as Shell are responding to current conditions by pursuing more natural gas, though recent declarations from the company suggest that's coming at cost to renewables.

Shell's integrated gas business generated $3.7 billion in adjusted earnings for the first quarter, representing almost half of its total earnings.

Natural gas prices, however, remain somewhat suppressed and Shell said total adjusted earnings for the first quarter were impacted by market conditions for super-cooled LNG.

Nevertheless, Shell joined the queue of companies signing up for a stake in the Ruwais LNG facility slated for Abu Dhabi. The company this week signed an offtake agreement to secure 1 million metric tons of product per year from the Ruwais facility.

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