Petronas Awards Engineering and Construction Contract for Malaysian FLNG Facility

KUALA LUMPUR–Malaysia’s state oil and gas company Petroliam Nasional Bhd., also known as Petronas, said Tuesday that it has awarded an engineering and construction contract (EPCIC) for a floating liquefied natural gas facility (FLNG) in Malaysia to a consortium comprised of Technip S.A. (TEC.FR) and Daewoo Shipbuilding & Marine Engineering Co. (042660.SE).

Petronas is building its first commercial FLNG facility scheduled to be ready for startup by end of 2015, the company said in a statement. In February 2011, Petronas first announced the front-end engineering and design (FEED) contract for the FLNG unit to the Technip/Daewoo consortium.

The facility will be moored about 180 kilometers off the eastern state of Sarawak and will be capable of producing 1.2 million metric tons a year of LNG.  Once operational, the facility will boost Malaysia’s total LNG production capacity to 26.9 million tons a year from the current 25.7 million tons.

Petronas, did not disclose the contract value.

FLNG facilities are expected to change the landscape of the LNG business where the liquefaction, production and offloading processes of LNG, which is now only possible at onshore plants, can be carried out closer to offshore gas sources.  Petronas is competing with Royal Dutch Shell,  which approved its Prelude LNG floating plant last year, to bring the world’s first FLNG facility online.  The much larger Prelude FLNG is expected to be operational by 2017.

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