An Exxon Corp. unit and Malaysia's state oil company have agreed to gas supply terms in the latest stage of that country's $4 billion peninsular natural gas utilization project.
Esso Production Malaysia Inc. and Petroliam Nasional Bhd. (Petronas) extended a 1989 agreement in principle covering gas development and sales terms for the second phase of Malaysia's Peninsular Gas Utilization (PGU-II).
Under terms of the deal, Esso will be the major gas supplier to the project. Esso has supplied gas to the Malay Peninsula since 1984 under PGU-I, currently limited to customers on the peninsula's eastern coast.
Under PGU-II, Esso will supply gas from Malaysia's offshore east coast fields to electrical power plants and industries throughout the Malay peninsula and to Singapore.
Petronas is laying a 450 mile onshore gas transmission grid on the peninsula that will handle gas demand expected to reach 1 bcfd by 2000.
DEVELOPMENT PLANS
To meet that demand growth, Esso is developing Jerneh gas field, at 3 tcf the biggest gas field Esso has found in Malaysia.
First phase development of Jerneh will cost about $500 million.
Jerneh, which lies in about 195 ft of water about 60 miles offshore in the South China Sea (see map, OGJ, July 22, 1985, p. 48), is scheduled to start up in April 1992.
First phase of the development project includes two platforms, a gas/condensate pipeline to shore, and onshore facilities to receive, store, and ship condensate.
Initial productive capacity at Jerneh will be 450 MMcfd, to be hiked to 750 MMcfd as demand grows during the 1990s. Under the agreements, Esso plans to develop more fields to meet further demand growth.
The investment estimate covers the expected 20 year life of the overall PGU project.
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