PETRONAS marks milestones for FLNG projects

Malaysia’s state-owned major PETRONAS is expected to moor its first floating LNG (FLNG) project at the Kanowit gas field by the end of May and its second FLNG project is nearing completion following the launch of its hull.

Once moored at Kanowit, PETRONAS will begin the commissioning process for the 1.2mtpa PFLNG SATU project. However, a spokesperson for PETRONAS was unable to confirm with ICIS as of 26 May when PFLNG SATU will start up and when it is expected to enter commercial operations.

The facility is expected to arrive at Kanowit, which is 180km offshore Sarawak, around 28 May, according to ICIS shipping analytics platform LNG Edge on 26 May.

While the PETRONAS spokesperson confirmed that the hull for the second FLNG project was launched on 30 April, the start-up timeline for the 1.5mtpa project – tentatively named as PETRONAS FLNG 2 (PFLNG2) – was unclear.

The launch of the hull this year was earlier than expected, given that PETRONAS had initially postponed the planned 1.5mtpa project’s commissioning schedule to a later date.

The commissioning of PFLNG2 was delayed after PETRONAS announced several cutbacks following a sharp drop in full-year revenue and profit for 2015 (see GLM 2 March 2016). At that time, the hull was only expected in 2018.

Once complete, PFLNG2 is expected to be moored at the Rotan gas field, which is 240km offshore Sabah.

PETRONAS sells less LNG in Q1 2016

The Malaysian company sold 7.4m tonnes of LNG in the first quarter of 2016, a 9% drop from the same period a year ago, partly because of lower production at its Bintulu LNG complex.

LNG was also sold at lower prices because of a downward trend in the dated Brent crude oil benchmark and Japan Customs Cleared (JCC) prices, PETRONAS said on 18 May.

“Concerns on a moderate demand outlook and persistent oversupply will continue to pressure crude oil prices,” the company said.

PETRONAS also recorded lower prices and a drop in sales on crude oil, condensates and petroleum products during the first quarter.

Total revenue from all commodities fell by 26% from the previous corresponding period to ringgit (M$) 49.1bn ($11.9bn) as a result. Profit after tax and impairments was at M$4.6bn for the quarter ended 31 March 2016, compared with M$11.4bn over the same period a year ago.

The decline in profit was partially offset by lower production costs and a favourable exchange rate against the US dollar, PETRONAS said. xieli.lee@icis.com