Petronas Delays Delivery of its Second FLNG

FLNG
Petronas' FLNG 1 (file image courtesy Petronas)

By MarEx 2016-02-29 21:14:16

Malaysian oil and gas firm Petronas announced its annual results for 2015 Monday, recording a 25 percent drop in revenue from the same period in 2014 and an approximately 50 percent drop in profit after tax – enough that the firm plans to delay commissioning of its second floating LNG facility, PFLNG 2.

The firm's president and CEO, Datuk Wan Zulkiflee Wan Ariffin, told reporters that the firm had worked hard to remain profitable, and would continue that commitment when facing the hard choices ahead.

“Our strong operations are a testament to the hard work put in by the dedication of our team to keep this organization going during these trying times,” he said, adding that the next two years would continue to be difficult.

Datuk said that the firm will probably not have enough cash flow from operations to cover both outstanding capital expenditures and its regular dividend payments to the state, which make up a significant portion of Malaysia's government revenue. He said that as part of cost cutting measures totalling four to five billion dollars per year, Petronas has decided to “re-phase” PFLNG 2, slowing its construction.

Petronas did not say when it expects to commission PFLNG 2 under the delayed delivery scheme.

The floating LNG facility only recently had its keel-laying ceremony at Samsung Heavy Industries in South Korea. It was originally scheduled for delivery in 2018, for use at a deepwater field 70 nautical miles offshore Sabah, Malaysia. It will have a design capacity of 1.5 million tons per annum (mtpa).

The firm's first such facility, PFLNG 1, is close to completion at Daewoo Shipbuilding and Marine Engineering; it is designed for a capacity of 1.2 mtpa, and will be installed at Kanowit field, located about 100 nautical miles offshore Sarawak, Malaysia. It was reportedly 95 percent complete in December.

The Prelude FLNG, built by Technip and Samsung for Shell, is also nearing completion. The 3.6 mtpa facility is expected to come online at the Prelude field offshore Australia by the end of this year.