LNG

Malaysian energy company Petronas has reported a fire at its main onshore liquefied natural gas production plant at Bintulu, located in the eastern state of Sarawak on the island of Borneo.

Petronas, the Malaysian state-backed energy company with onshore and floating liquefied natural gas plants, reported a near 70 percent fall in first-quarter profits as almost 10 million tonnes of LNG were sold amid declining crude oil and LNG prices.

Petronas said that profit after tax for the period from January through March 2020 fell to 4.5 billion Malaysian ringgit ($1.03Bln) from 14.2Bln ringgit ($3.25Bln) in the same period last year, a drop of 68 percent.

Without the asset write-downs because of the market challenges of 4.67Bln ringgit ($1.07Bln), profits would have totalled 9.2Bln ringgit ($2.10Bln).

Petronas revenues for the quarter were 59.6Bln ringgit ($13.65Bln), a decline of 4 percent on the 61.99Bln ringgit ($14.20Bln) in the prior-year quarter.

The company’s LNG and gas earnings performances are part of the Gas and New Energy division report.

Petronas said quarterly pipeline natural gas sales were 13.4 percent lower at 2,566 million standard cubic feet per day compared with 2,962 mmscf per day in the 2019 first quarter.

“Malaysia average sales gas volume for the first quarter of 2020 was lower by 396 mmscf per day compared to the first quarter of 2019, mainly driven by lower offtake from power sector in Peninsular Malaysia,” said Petronas.

LNG sales rose 6.5 percent in the quarter to 9.99MT compared with 9.40MT in the same three months of 2019.

Petronas has produced LNG at its Bintulu onshore LNG complex since 2013 and its FLNG plant offshore Sabah, giving combined production of more than 26 million tonnes per annum, making the nation the largest Asian producer and the fourth-largest exporter in the world after Australia, Qatar and the US.

The Malaysian company also receives LNG offtake as a shareholder in the Gladstone LNG export plant in Queensland, Australia. Its overseas volumes will also increase in the next few years when LNG Canada comes on stream.

“The gross LNG sales volume for the first quarter was higher by 0.59 million tonnes compared to the first quarter, mainly attributable to higher trading activities as more opportunities arose due to increased liquidity,” explained Petronas.

Gas and New Energy revenue was 22.5Bln ringgit ($5.15Bln), down 8 percent from a year ago, mainly due to the impact of lower average LNG realised prices, partially offset by the effect of a weakening ringgit against US dollar.

Petronas President and Chief Executive, Wan Zulkiflee Wan Ariffin, said the company like others had suffered the ongoing effects of the Covid-19 pandemic and the collapse in oil prices.

“The oil and gas industry has been badly affected by the unprecedented twin shock of both supply and demand,” he added.

“For our operations, we ensured that we continue to optimally operate our total business value chain, as safely and efficiently as possible, to fulfil the energy needs of the nation and to our customers globally,” explained Wan Zulkiflee .

“For 2020, we are planning to reduce our Capex by 21 percent and lower our operating expenditure by 12 percent, compared to what we had budgeted for previously,” stated the CEO.

After the end of the first quarter, Petronas had signed a sales and purchase agreement in May for an LNG tank filling facility at Sarawak for onward shipment to China in ISO containers.

The Malaysians signed the SPA with Tiger Clean Energy Ltd via a video teleconference because of the Covid-19 travel restrictions.

Petronas will supply Tiger Clean Energy at Bintulu in Sarawak.

LNG supplied in the ISO containers would subsequently be distributed to remote locations in China out with the pipeline grid, which is a widespread service for Chinese gas users supplied by truck.

Malaysian energy company Petronas said it had sucessfully moved its “PFLNG Satu” floating LNG production hull to the Kebabangan field offshore Sabah and introduced the first feed-gas volumes, while the initial cargo was expected to be shipped within weeks.

The “PFLNG Satu” had previously been located over the Kanowit stranded gas field offshore Sarawak where it became the world’s first FLNG vessel to start commercial operations in 2017.

It has now been moved to a location 90 kilometres offshore Sabah, the Malaysian state on the northern part of the island of Borneo, and is starting liquefaction of gas from the Kebabangan cluster field.

The first LNG cargo delivery from the new field is scheduled to take place in June.

“The introduction of first gas into the ‘PFLNG Satu’ was to the turret system via a 5-kilometre flexible pipeline,” said Petronas.

“The commencement of a series of start-up activities included the cooling down of natural gas until the production of the first LNG,” it added.

The Petronas Vice President of LNG Assets, Zakaria Kasah, said the moving of the FLNG hull showcases the company’s focused execution and collaboration efforts.

“We not only prove our concept of a relocatable floating LNG facility, but we have also seamlessly achieved the first LNG in just three days after first gas,” added Kasah.

“This is indeed another proud moment and a great milestone for Petronas and the floating LNG industry,” he stated.

Designed for water-depth of between 70 metres and 200 metres and with a processing capacity of 1.2 million tonnes per annum, the “FLNG Satu” operates with a crew of 155 onboard.

Petronas is also developing a second FLNG venture using another vessel to be deployed over the deepwater Rotan gas field, about 80 miles offshore Sabah.

Its joint venture partner is the Thai state energy company PTTEP, which purchased its stake from Murphy Oil, the US exploration and production company.

The Rotan gas well was discovered by Murphy in 2007. The Rotan field FLNG vessel is being designed to produce 1.5 MTPA.

Murphy Oil, the US exploration and production company whose Rotan natural gas discovery offshore Malaysia is the subject of a floating LNG joint venture, has sold its Malaysian assets for more than $2 billion to Thailand state energy company PTT Exploration and Production.

Murphy Oil, the US exploration and production company whose Rotan natural gas discovery offshore Malaysia is the subject of a floating LNG joint venture with state energy company Petronas, said the FLNG project was high on its investment plans as it reported its fourth-quarter results.

May 3 (LNGJ) - Murphy Oil, the US energy company based in Arkansas and with US and international operations, said in its first-quarter earnings that its floating LNG joint venture offshore Malaysia was still on track for first production in 2020. Murphy is investing in the FLNG venture with Malaysian state energy company Petronas, which successfully started up the world’s first production hull, the “PFLNG Satu”. That vessel is deployed over the stranded Kanowit gas field offshore Sarawak. The US company is involved in a second Malaysian FLNG venture for the deepwater Rotan gas field, about 80 miles offshore of Sabah, the Malaysian state occupying the northern part of the island of Borneo. The Rotan gas well was discovered by Murphy in 2007 in the Block H licence in Malaysian waters of the South China Sea. The FLNG vessel will be designed to produce 1.5 million tonnes per annum.

US energy exploration and production company Murphy Oil Corp. said it was progressing with plans to invest in a floating liquefaction project offshore Malaysia led by state-run Petronas and set to come on stream in 2020.