- Upstream reported that the award to provide a floating,
production, storage and offloading (FPSO) vessel for the Belud field in Block
SB 302 off Sabah could be delayed as US-based Hess has called for M3nergy, Bumi
Armada and MISC to resubmit their bids. Hess, which is still negotiating a gas
sales contract with Petronas, is understood to have sought extension of bid
validity from the three bidders. The Belud FPSO tender was revived in early
July this year, but the status of the gas sales contract remains unclear.
- The scope of the FPSO contract has been expanded to
include additional front-end engineering and design and detailed engineering
studies. The production floater is now expected to be an Aframax-sized vessel
that will be spread-moored closer to a new wellhead platform for the Belud
field development. Additionally, the FPSO charter has been extended to 10 years
from the previous seven-year firm charter plus an eight-year extension.
- The Belud FPSO was originally intended to be equipped to
process 7,500 barrels of oil per day, 15,000 bpd of liquids and 150 million
cubic feet of gas per day from up to seven subsea risers. The floater, tied to
a wellhead platform, will initially extract output from the Belud South
discovery, followed by Belud East. First gas from Belud was first targeted for
mid-2014, but this is facing delays given the-re-tender for key production
facilities.
- Meanwhile, Petronas has awarded the front-end engineering
and design (FEED) contract for the country’s first vessel-based chemical
enhanced oil recovery (CEOR) project in the matured Angsi field off Peninsular
Malaysia to MMC Oil & Gas Engineering and Water Standard of the US. The
contract, expected to last for about three months, is a roll-over from the
basic engineering contract already awarded last year to the two players for the
Angsi enhanced oil recovery project.
- The Angsi FEED studies will also involve a proposal for
the mixing and transportation of the chemical mixture of alkali, surfactant and
polymer (ASP). One possible solution involves the construction of a new plant
at the Kemaman supply base to process and store the ASP inventory and to
transport the required volume to the vessel location. However, Upstream
reported that Petronas appears to be moving towards two other lower-cost
options for the processing of chemicals offshore either on board the CEOR
vessel or on a leased or purpose-built barge. Petronas is believed to have
lined up its subsidiary MISC for the operations and maintenance of the CEOR
vessel, with delivery expected in 2014.
- But the US$5.2bil (RM16bil) North Malay basin project,
being undertaken by Petronas Carigali and Hess, is going ahead as planned with
first gas from the Kamelia field expected by 1Q2013. Hence, we remain
OVERWEIGHT on the sector given that Petronas remains committed to its RM300bil
2011-2015 capex programme, which is likely to accelerate next year onwards despite
a slow start for the first two years.
Our top BUY is Petronas Gas, as its earnings growth will reach an
inflection point with the commencement of the 530mmscfd Lekas regasification
terminal (RGT) in September this year, further supported for future RGT
projects in Lahad Datu, Pengerang and Lumut. Our other BUY calls are
SapuraKencana Petroleum, Malaysia Marine & Heavy Engineering Holdings, Bumi
Armada and Dialog Group.
Source: AmeSecurities
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