Petronas Cuts First Steel for FLNG Facility

Malaysia's Petronas announced that construction of its first Floating Liquefied Natural Gas (FLNG) facility has begun following a steel cutting ceremony for the hull at the Daewoo Shipbuilding & Marine Engineering (DSME) shipyard in Okpo, South Korea.

The steel cutting event signifies a major milestone for the project, the world’s first, to proceed to its construction phase to meet its commissioning schedule in 2015.

Petronas’ President and Group CEO Shamsul Azhar Abbas, Technip’s President and CEO Thierry Pilenko, and DSME’s President and CEO Jaeho Ko were present at the ceremony.

Petronas signed the engineering, procurement, construction, installation and commissioning contract for the project with the Technip and DSME consortium in June 2012.

The floating LNG facility will be located in Malaysia’s Kanowit gas field in Block SK306, 111.8 miles offshore Sarawak and will have the capacity to produce 1.2 million tons per annum of LNG.

"Once operational, the facility is expected to change the landscape of the LNG business where the liquefaction, production and offloading processes of LNG, previously only possible at onshore plants are now able to be carried out hundreds of kilometres away from land and closer to offshore gas sources," Petronas said in a media release.

"As such, the facility will also play a significant role in efforts to unlock the gas reserves in Malaysia’s remote and stranded fields currently deemed uneconomical to develop and evacuate."