Petronas, Esso sign PSC to develop 22 gas fields off Malaysia

Malaysia's national oil company Petronas has signed a production-sharing contract (PSC) with Esso Production Malaysia Inc. (EPMI) and Petronas Carigali Sdn. Bhd. for the development of 22 natural gas fields off Peninsular Malaysia. The PSC will provide long-term gas supply to the Peninsular Gas Utilization (PGU) project. The signing formalizes the terms of an agreement announced last year. Under the PSC terms, EPMI will relinquish to Petronas the remaining undeveloped gas fields it

Nov. 30, 1998

2 min read

The PSC will provide long-term gas supply to the Peninsular Gas Utilization (PGU) project. The signing formalizes the terms of an agreement announced last year.

Under the PSC terms, EPMI will relinquish to Petronas the remaining undeveloped gas fields it discovered under the 1976 PSC.

The new PSC will include 13 relinquished fields and 9 Petronas gas-cap fields from the PM-9 and 1995 PSCs.

EPMI and Petronas Carigali will own equal stakes in the PSC. Estimated gas reserves in the 22 fields total about 12.6 tcf. First gas from the project is expected in 2002.

The two companies will supply the PGU project with up to 1.3 bcfd of gas to 2027.

EPMI will operate the fields around its existing production hubs at Jerneh and Lawit, while Petronas Carigali will operate the new Angsi gas field development and nearby facilities.

A 160-km gas pipeline will be laid from Angsi to Petronas's gas processing plants at Kertih, Terengganu. Total investment committed by both firms is estimated at $6.58 billion.

The PSC marks another major step in the consolidation of the development of gas fields off Peninsular Malaysia to EPMI and Petronas Carigali.

Gas supply from the new PSC gas fields will add to the volume already committed to the PGU project from the existing EPMI-operated fields, sufficient to meet about two-thirds of projected gas demand in Peninsular Malaysia for the next 25 years. Other PSC contractors are expected to accommodate the balance of future demand in the region.