Mubadala Petroleum begins gas production at Malaysia project

The pegaga gasfield has capacity to produce 550 million standard cubic feet of gas per day plus condensate

Mubadala Petroleum has been present in Malaysia since 2010 and is the operator of Block SK 320 with a 55% interest. Photo: Mubadala Petroleum

Abu Dhabi-based Mubadala Petroleum has begun producing gas from the Pegaga field offshore in Malaysia.

The facility has the capacity to produce 550 million standard cubic feet of gas per day plus condensate. Gas produced will be directed through a new 4-kilometre, 38-inch subsea pipeline tying into an existing offshore gas network and subsequently to the onshore Petronas LNG Complex in Bintulu.

The move marks the "culmination of a challenging gas project", during a period in which Mubadala Petroleum navigated the challenges of the global pandemic, the company said in a statement on Monday.

“Having taken this project from discovery to development and now into production with the support of Malaysia Petroleum Management Petronas, our partners and contractors, this demonstrates our deep capabilities, resilience and commitment as an energy provider," said Mansoor Al Hamed, chief executive of Mubadala Petroleum.

"With our strategic focus on gas as a key bridge fuel in the energy transition, this achievement reflects our ambition for the future as a long-term investor and strategic energy partner.”

Mubadala Petroleum, a unit of Abu Dhabi’s strategic investment firm Mubadala Investment Company, has a gas weighted portfolio with assets and operations spanning 11 countries, primarily in the Middle East and North Africa, Russia and South-east Asia. It produces about 430,000 barrels of oil equivalent per day.

Last year, the company finalised a $1 billion deal with Israel’s Delek Drilling to buy a 22 per cent stake in the Eastern Mediterranean's offshore Tamar field.

Mubadala Petroleum has been present in Malaysia since 2010 and is the operator of Block SK 320 with a 55 per cent interest. Petronas Carigali Sdn, a subsidiary of Petronas, holds 25 per cent and Sarawak Shell Berhad has the remaining 20 per cent interest.

The Pegaga gasfield is in the Central Luconia province, offshore Sarawak, at about 108-metre water depth. The development concept comprises of an integrated central processing platform (ICPP). The jacket and wellhead deck, which were constructed locally, were installed in April 2020 followed by the Pegaga development drilling campaign. The ICPP float-over and installation was then completed in August 2021.

Pegaga will be a "key producing field" supplying gas to the Petronas LNG Complex in Bintulu and is expected to "significantly contribute towards sustaining Malaysia’s gas supply for many decades", the statement said.

“The project, which undertook its final investment decision at the time when the oil market was still recovering in 2018, demonstrates the confidence of investors in Malaysia’s upstream industry," said Mohamed Asnan, senior vice president of Malaysia Petroleum Management at Petronas.

"The country’s ecosystem also proved its resiliency with the successful design and fabrication of facilities completed during the peak of the Covid-19 pandemic."