Malaysia's Petronas said Thursday that it has awarded three gas production sharing contracts to the exploration arm of U.S.-based Hess Corp.
The North Malay Basin Project, which comprises nine gas fields, is sited 186 miles (300 kilometers) off the east cost of Malaysia.
The first contract is an amended production sharing contract (PSC) for the offshore block PM302, while the other two contracts are new exploration PSCs for the offshore blocks PM325 and PM362B adjacent to PM302.
Petronas and Hess hold equal stakes at all three PSCs.
Petronas has projected that the project will cost around $5.2 billion.
Petronas is aiming to commercialize approximately 1.7 trillion cubic feet of gas reserves from the area. Alongside developing the nine gas fields, Petronas plans to construct a new gas gathering, processing and transportation hub. It also plans to build a new onshore slug catcher.
Petronas and its sharing partners are aiming for first delivery of 100 million standard cubic feet (MMscfd) of gas per day by 1Q 2013. Gas production could be ramped up to 300 MMscfd by 2015, Petronas said.
The project was started in an effort to enhance the security of Malaysia's gas supply.
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