Hess Malaysia, Petronas agree to include Kangsar field

by SHAHEERA AZNAM SHAH / pic credit: petronas.com

HESS Malaysia and Petroliam Nasional Bhd (Petronas) have agreed to amendments made to the existing upstream gas sales agreement (UGSA) to include Kangsar field and any future PM325 production sharing contract (PSC) field.

The natural gas producer and supplier said the inclusion of the Kangsar field would enable greater access to new gas supplies for Peninsular Malaysia and strengthen its position as a key natural gas producer for Malaysia.

Hess Asia VP Zhiyong Zhao said the amended UGSA marked an important milestone for the ongoing development of the North Malay Basin (NMB) project.

“The amended UGSA delivers access to new gas supplies that are critical to Malaysia’s economic prosperity and energy security.

“The arrangements strengthen Hess Malaysia’s position as a key natural gas supplier for the country and build on the longstanding and successful partnership between Hess, Petronas and Malaysians.

“We look forward to continuing this fruitful partnership as we further develop the NMB project,” he said in a statement yesterday.

Hess Malaysia and its partner, Petronas Carigali Sdn Bhd, a subsidiary of Petronas, had successfully concluded negotiations with Petronas to amend the UGSA of the PM302 PSC to include the sale and purchase of gas produced from the Kangsar field.

The negotiations also include gas produced from any future PM325 PSC field under the existing UGSA terms.

The UGSA governs the sale and delivery of gas from the NMB project to Petronas and assists the national energy and solutions company meet its supply and sale commitments in Peninsular Malaysia, Hess Malaysia said.

The Kangsar natural gas field is located offshore Peninsular Malaysia. It was discovered in 2018 and is part of the recently sanctioned NMB Phase 4A development. The first gas targeted in the third quarter of 2022 (3Q22).

Last year, Hess Malaysia and Petronas Carigali had signed a heads of agreement to merge the field for development.

At present, Hess Malaysia is in Phase 2 of the NMB development.

Hess Malaysia said the drilling programme for Phase 3 is expected to commence in 3Q21, with the first gas planned in 2Q22.

“The NMB project, comprising PM302 and PM325 PSCs, is a long-life natural gas asset consisting of ten discovered natural gas fields with an estimated gross recoverable resource of more than 1.5 trillion cu ft (42.47 billion cu m) of natural gas and more than 20 million barrels of condensate,” the group said.

Hess Malaysia, a subsidiary of the US-based Hess Corp, is the operator of the NMB project with a 50% interest, while Petronas Carigali holds the remaining stake.