Unlocking Value & New Resources in the Gulf of Thailand
Hess Corporation Logo header
SEARCH

Unlocking Value & New Resources in the Gulf of Thailand

  • WO_Newsroom

World Oil Staff

About a decade ago Malaysia faced growing concerns about gas shortages on Peninsular Malay, where about 80 per cent of the population lives. At the same time the country faced the challenge of how to develop a group of large natural gas fields in the Gulf of Thailand, that had been considered stranded resources.

The ten fields, which were estimated to contain approximately 1.7 trillion cubic feet (TCF) of gas resources, lay approximately 300 kilometers offshore Peninsular Malaysia, across three blocks.

In 2012, U.S. independent energy company Hess Corporation, was selected by the Malaysian national oil company, PETRONAS, to help develop these fields in what would become known as the North Malay Basin (NMB) Integrated Gas Project. The project would be equally owned by Petronas and Hess with Hess also becoming operator.

A long and strong partnership and presence in South-East Asia

Prior to its entry into the NMB Project, Hess had enjoyed a long presence in South-East Asia, and was not a newcomer to Malaysia, having bought an interest about two decades earlier in the prodigious Block A-18 production asset in the Malaysia/Thailand joint development area.

Greg Hill, Hess President and COO noted that Block A-18 operated by Carigali Hess, had provided the company with deep experience in the Gulf of Thailand and the North Malay Basin.

“We were very honored to be selected by Petronas to help develop NMB. We knew that our long history in the basin along with the knowledge and technical expertise we had obtained positioned us well for success.

“Along with the tremendous partnership we had formed with the National Oil Company, we felt this partnership was going to be a great fit for Hess and for Malaysia.”

Hill also noted that the North Malay area was immediately south of Block A-18, where he says Hess learned how to “optimize gas production from these types of reservoirs where there are multiple gas bearing zones at depths of between 1000 meters and 3000 meters.”

Early production system (EPS) and full field development (FFD)

The initial development concept for NMB targeted nine stranded gas fields – Bergading, Bunga Dahlia, Teratai, Gajah, Melati, Kamelia, Zetung, Anggerik and Kesumba through the deployment of a floating production storage and offloading (FPSO) vessel. Later in 2018, a tenth field was identified, Bunga Kangsar.

Hess swung into action with the Kamelia project, for which it already had a field development plan. Kamelia, became the initial phase, or what would be known as the early production system (EPS).

The concept for Kamelia was a wellhead platform that was based on a design similar to those platforms in Block A-18, and the leased floating production, storage and offloading vessel Perisai Kamelia. Early production was brought on-stream in October 2013, about a year after Hess’ entry into NMB.

Subsequently in 2014, Hess and PETRONAS submitted a Field Development Plan (FDP) for Phase 1 of the FFD that included the Bergading central processing platform (CPP) that bridge-linked to Bergading A wellhead platform, and three additional wellhead platforms – the Bergading C, Bergading D and Kesumba platforms. 

In 2017, PETRONAS completed the Terengganu Gas Terminal (TGAST) plant, which was designed to receive the gas extracted offshore. The Gas Terminal would be connected to a 300-kilometers offshore pipeline.

“NMB is a multi-operator project, with the offshore component operated by Hess and the onshore gas terminal operated by PETRONAS,” explained Gerbert Schoonman, Senior-Vice President of Production for Hess.

“The gas is sent from the CPP to the onshore plant where NMB gas helps to blend down other higher CO2 gas feeders. The CO2 is then further removed onshore and sent to PETRONAS which typically sends the gas on to its gas processing plants.  From there the gas is sent through the Peninsular grid to power plants for power generation throughout Malaysia.”

With the completion and installation of the CPP and the many significant inter-related pieces of this complex development, first gas was achieved for the full field development in July 2017 - only 3 years after project sanction with a nameplate capacity of 400 million cubic feet a day.

NMB phase two - Growth and innovation

While 2017 saw start-up of the full field development, it also saw sanction for Phase 2 of the project, which would leverage the Bergading CPP.  In Phase 2, Zetung and Anggerik fields would be developed with nine production wells and the construction, transport and installation of two three-legged remote wellhead platforms, as well as the pipelines that serve them, with gas flowing to the CPP.

The wells were completed between July 2019 and July 2020. Phase 2 achieved first gas from the Zetung wells in December 2019, and the Anggerik wells followed. 

Despite workforce restrictions required by COVID-19 safety protocols, the Hess-Petronas partnership achieved several important innovations:

  • Installing first-of-its-kind gas tracer technology in six wells to verify the effectiveness of well cleanup for each reservoir section
  • Applying geosteering and logging-while-drilling technology to map reservoir and fluid boundaries; and
  • Introducing offline well test operations

Phase 3 fabrication started in 2020 in the midst of the COVID-19 pandemic. The fabrication entailed the construction of a new wellhead platform to develop Bergading Deep High-Pressure, High-Temperature resources between 80 and 100 billion standard cubic feet (BSCF) gross sales gas. First gas for Phase 3 is expected in the second quarter of 2022.

For Phase 4a of the project, Hess has awarded the contract for engineering, procurement, construction and commissioning of three wellhead platforms. The works will accommodate the Dahlia, Kangsar and Teratai fields in the eastern part of NMB and include the fabrication and installation of one remote and two minimal wellhead platforms to develop more than 500 BSCF gross sales gas starting the last quarter of 2022.  A network of subsea pipelines will be installed to tie the wellhead platforms to the central processing hub.  

Phases 3 and 4a of the project will extend the NMB production plateau past 2025.

On to Deeper Wells

While each phase of the North Malay Basin development advanced the project, the completion of the Mercury Removal Unit (MRU) in late 2020 was also a major milestone that is helping unlock the full potential of the asset.

Hess discovered high levels of mercury in some of its deep wells in 2018.  While the presence of mercury in gas wells is not unusual, the company blended the gas produced with low mercury gas from shallow wells to ensure health and safety standards were maintained.

“The MRU enables production of gas with higher mercury levels to be processed offshore to required specifications,” said Zhiyong Zhao, Hess Asia Vice-President. “It will enable Hess to deliver full value from the potential of Phases 3 and 4a safely and responsibly while ensuring we meet our Gas Sales Agreement obligations.”

At full capacity the MRU will be capable of processing more than 400 million standard cubic feet per day of high mercury hydrocarbon gas with 100 percent redundancy.

A Partnership that has delivered for Malaysia

Fast forward to today, and it is easy to tell that NMB has seen the combined technical expertise of Hess and PETRONAS, along with a multi-billion-dollar capital investment by the partners, turn the potential of NMB into a reality - delivering new gas supply to peninsular Malay from what were previously considered stranded resources.

“Together with our great partners at Petronas we have achieved a number of important production milestones since we were first selected to develop and operate NMB, said Greg Hill, President and COO at Hess.

“We are very proud of what we have jointly achieved and what we are working hard to progress in the next phases of a development.

“Hess remains committed to developing future phases of NMB to the same exacting standards we have applied to date and to ensuring that NMB continues to deliver reliable gas supplies to the region.”

Related News
  • Hess Endorses World Bank’s “Zero Routine Flaring by 2030” Initiative

    Hess Corporation is pleased to endorse the World Bank's "Zero Routine Flaring by 2030" initiative.
    Full story
  • Hess Announces Two Discoveries Offshore Guyana

    Hess today announced two significant discoveries at the Fangtooth-1 and Lau Lau-1 wells on the Stabroek Block offshore Guyana.
    Full story
  • Hess Achieves CDP Climate Change Leadership Status

    Hess Corporation has been recognized for climate change stewardship in CDP’s Climate Change Scores for 2021. Hess has earned Leadership status for 13 consecutive years from CDP, an international nonprofit organization that runs a global environmental disclosure system.
    Full story