Regional LNG: MLNG Tiga plant secures buyers for 5.5m tons of LNG

THE MLNG Tiga plant in Bintulu, which processes gas from the Helang Gas Field offshore Sarawak, has secured the sale of 5.5 million tons of liquefied natural gas (LNG) to buyers from Japan and South Korea, Malaysia's Business Times reported Friday.

Nippon Oil Corp president and chief executive officer (CEO) Fumiaki Watari said the MLNG Tiga plant can process 6.8 million tons of LNG annually.

Watari said negotiations are under way with utility companies from Japan for the remaining 1.3 million tons of LNG from the plant.

“The 5.5 million tons have been contracted to (among others) Tokyo Gas Co Ltd, Osaka Gas Co Ltd, Toho Gas Co Ltd and Tohoku Electric Power Co Inc,” Watari said at a press conference in Kuala Lumpur yesterday.

He declined to reveal the value of LNG contracts signed so far.

Watari said Nippon Oil is also eyeing China as there is a potentially large demand for LNG from China in the near future.

Commercial production at the Helang Gas Field began on November 18 last year.

The Helang field’s production rate is expected to peak to about 250 million cubic feet per day for gas and 23,000 barrels per day (bpd) for the condensate.

The gas and the condensate from the Helang field, located in Block SK-10, about 70km from Miri, are transported through the sub-sea pipeline to Bintulu to be separated and liquefied at the MLNG Tiga plant, which is owned by Malaysia LNG Tiga Sdn Bhd.

The condensate is sold at the wellhead to Petroliam Nasional Bhd (Petronas).

The Helang Gas Field is estimated to have reserves of 1.5 trillion cubic feet of natural gas and 50 million barrels of condensate, which are expected to last for about 20 years.

Watari said the company invested about US$500 million to develop the Helang Gas Field, including the cost of building the platform and drilling wells.

Nippon Oil Exploration Malaysia Ltd (Noma) is 40.15 per cent held by Nippon Oil Exploration, 15 per cent by Teikoku Oil Co Ltd, 6.27 per cent by Mitsubishi Corp and 38.58 per cent by Japan National Oil Corp.

Malaysia LNG Tiga is 60 per cent owned by Petronas, while the remaining shares are held by the Sarawak State Government (10 per cent), Nippon Oil LNG (Netherlands) BV (10 per cent), Shell Gas BV (15 per cent) and Diamond Gas (Netherlands) BV (5 per cent).

“When production from the Jintan Gas Field starts by the middle of this year, Malaysia will become the largest producer of LNG for Nippon Oil,” he said, overtaking gas fields in Vietnam and the North Sea.

Nippon Oil, through its subsidiary Nippon Oil Exploration Sarawak Ltd (Nosa), is developing gas-producing facilities for the Serai and Jintan Gas Fields in Block SK-8, which is adjacent to Block SK-10 offshore Sarawak.

The gas production from Serai and Jintan is scheduled to begin in the second and third quarters of this year respectively.

Compared to the Helang Gas Field’s daily capacity of 250 million cu ft, the capacity of Jintan will be 600 million cu ft per day.

It has been estimated that by the third quarter of 2004, the aggregate gross production of Helang, Serai and Jintan fields will be at 1.05 trillion cu ft per day for gas and 23,000 bpd for the condensate.(*)