KUALA LUMPUR: Petronas Carigali Sdn Bhd has inked a heads of agreement (HOA) with JX Nippon Oil & Gas Exploration Corp to collaborate in developing a joint proposal to monetise the gas potential within the Bujang, Inas, Guling, Sepat and Tujoh (BIGST) fields that are located offshore Kerteh, Terengganu.
The BIGST opportunity was offered as part of Malaysia Bid Round 2020, for which it received several proposals from interested parties, and Petronas Carigali and JX Nippon were shortlisted based on the quality of their submissions and unique value propositions, according to a statement issued by Petroliam Nasional Bhd (Petronas). Petronas Carigali is Petronas' wholly owned exploration arm.
“The business value proposition by Petronas Carigali and JX Nippon will form the basis towards the negotiation of the PSC (production sharing contract) for this cluster,” the statement read.
The HOA was signed on Dec 5 by Petronas Carigali chief executive officer Hasliza Othman on behalf of Petronas Carigali, while JX Nippon was represented by its managing director and chief representative in Malaysia, Yasuto Ariga.
Also present were Petronas senior vice president of Malaysia Petroleum Management (MPM) Mohamed Firouz Asnan, and MPM senior general manager of resource development and management Aidil Shabudin. Petronas, through MPM, manages petroleum arrangements in Malaysia and provides stewardship on upstream petroleum activities.
“The gas supply from BIGST fields is important for Peninsular Malaysia's energy security given the significant potential that exists within the cluster. Carbon capture and storage (CCS) technology will be key solutions in monetising the fields since these fields contain high carbon dioxide (CO2) and will be the first CCS project in Peninsular Malaysia,” said Aidil.
According to Petronas, the BIGST cluster will also be the catalyst that is expected to spur the development of other high contaminant fields in Peninsular Malaysia, which was not possible previously, due to the lack of complete CO2 handling infrastructure.
“Petronas Carigali is expected to bring to the table its capability in developing CCS projects, building on its recent experience on Kasawari CCS that was sanctioned recently. Petronas would move closer towards its aspiration of achieving net zero carbon emissions by 2050 through these carbon reduction solutions,” Aidil added.
In a separate statement, JX Nippon president and CEO Toshiya Nakahara said the company has executed the HOA with Petronas Carigali to jointly make a business value proposal to Petronas on the development of high CO2 gas fields discovered offshore Peninsular Malaysia, and initiate discussions on the possible acquisition of interests in these gas fields.
According to Nakahara, JX Nippon understands that this initiative not only contributes to stable supply of natural gas to Peninsular Malaysia but at the same time expands its business in Malaysia — one of the core countries for JX Nippon.
“Since the study concluded that the development of such high CO2 gas fields is feasible with low environmental impact by utilising CCS technology, JX Nippon came to the decision to further evaluate these gas fields with Petronas Carigali and work together towards submitting the business value proposal to Petronas,” he added.
Source : The Edge Markets