“Oil and Gas EngineeringKey to a Sunrise Industry in Sabah
from an Academic Perspective”
Energizing Sustainable Future
Flow of Thoughts
• Upstream, Midstream and Downstream Operations
• Recent Trends in Oil and Gas Sector in Malaysia
• NKRA in Oil and Gas – Sustain, Grow and Diversify
• UMS Education Programmes and Research Projects
• Collaboration with Stakeholders
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The Scope of Energy Oil & Gas
gk
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Upstream Activities : Exploration, Drilling, Completion & Production
• Exploration
– Seismic
– Exploratory Drilling
• Appraisal
– Appraisal Drilling
– Well Testing
• Field Development
– Dev. Drilling
– Reservoir
– Production
– Facilities
• Work over / EOR/EGR
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Downstream Activities : Processing, Treatment & Marketing
•Refining/Processing/Treatments
–Petrol, diesel, kerosene, grease,
bitumen
–Gases: ethane, propane, butane
•Petrochemicals
–Plastics, synthetic rubber, solvents
•Transmission/Distribution
•Marketing
•Consumer Products Manufacturing
•Services
•Others
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Recent Trends in Oil and Gas Sector in Malaysia
• Malaysia produces 2% of the world’s natural gas
• Accounts for about 13% of the world's Liquefied Natural Gas (LNG)
exports
• Sold largely to Japan, South Korea and Taiwan
• Malaysia : 3rd largest in the Asia Pacific region (After China & India)
• As a net exporter of oil and gas, 40% of Malaysia’s total revenue
derived from petroleum sources.
Energizing Sustainable Future
National Key Economic Areas(NKEA)
Five major growth spots of Oil and Gas
Regional oil storage
and trading hub
Enhanced Oil
recovery (EOR)
initiatives
Innovative
approaches in
developing
marginal fields
Intensifying
domestic
exploration
activities
Refinery And Petrochemicals Integrated
Development Project (RAPID) in Pengerang,
Johor and several major downstream
petroleum and petrochemical projects.
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NKEA OIL AND GAS SECTOR:
SUSTAIN
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New Oil and Gas Discoveries
Date
Resource
Quantity
Location
JV
Jan 2013
Oil and Gas
Initial flows:
440 bbl./d crude oil,
11.5 MM cf./d natural gas
Adong Kecil West-1 well in
Block SK333, onshore
Sarawak
JX Nippon Oil & Gas Exploration
(Onshore Sarawak) Limited and
PETRONAS Carigali Sdn Bhd.
April 2013 Natural Gas 1.5-3 trillion cubic feet of
gas (Est.)
B-14 well,
Block SK310, onshore
Sarawak
Newfield Exploration Company, Partners
Diamond Energy Sarawak and Petronas
Carigali Sdn Bhd.
May 2013
Oil
200 million stock tank
barrels (MMstb)
Cendor Graben-2, Block
PM304, Offshore Peninsular
Malaysia
Petrofac (Malaysia PM304) Ltd, Petronas
Carigali Sdn Bhd, Kuwait Foreign
Petroleum Exploration Company and
Petro Vietnam Exploration Production
Corporation Ltd.
Nov 2013
Gas
247 metres of gas column
Pegaga-1 well, Offshore of
Block SK320, NW of Bintulu,
Sarawak
PETRONAS Carigali Sdn Bhd and
Mubadala Petroleum
Dec 2013
Gas
292 metres of gas column
Sintok-1 well, Offshore of
Block SK320, NW of Bintulu,
Sarawak
Energizing
Sustainable Future
PETRONAS Carigali Sdn Bhd and
Mubadala Petroleum
Marginal Oil Fields Development
• PETRONAS - Initiated Risk Sharing Contracts (RSC) for Marginal Oil
Fields development
• Marginal Oil Fields Development – Aims to rejuvenate the oil and gas
industry, since majority of Malaysian oil fields are entering the mature
phase
• Mature phase: Declining oil and gas extraction, after 30 years of
exploration and production (E&P)
• Malaysia has around 106 marginal fields, with approx. 580 million
barrels of oil.
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Enhanced Oil Recovery (EOR)
Source:drillinginfo.com
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Enhanced Oil Recovery (EOR)
• 50% of Malaysia’s producing oil fields have EOR potential (Estimated)
• Currently, more than 10 EOR projects in the pipeline at various maturation stages.
• Since Sept 2014, EOR implemented at Tapis oil field (Offshore Terengganu)
• This project, worth RM10 billion – boost declining production between 25,000 to
35,000 barrels per day (bbl./d) in 2016 and between 3,000 to. 4,000 bbl./d in 2017.
• Tapis is one of seven mature fields offshore Peninsular Malaysia, developed by
ExxonMobil and PETRONAS via 25-years PSC
• Work is being carried out on seven fields: Seligi, Guntong, Tapis, Semangkok, Irong
Barat, Tebu and Palas
Energizing Sustainable Future
EOR cont.’
• Shell
and PETRONAS agreed to invest $12 billion over 30
years in two EOR projects offshore Sarawak and Sabah
(Baram Delta and North Sabah) covering nine fields.
• Expected to boost reserves by 750 million barrels and use the
world’s first offshore, chemical injection process for resource
recovery
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Deepwater Projects
Source:
Frost and Sullivan
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Deepwater Projects
Location
JV
Status
Remark
Kikeh Oil
Field
Murphy Oil and
Petronas Carigali
In Operation
Recoverable reserve base: 400 to 700 million barrels of oil.
Production plateau: 120,000bpd for the first 8 years
Gumusut / Shell (operator),
Kakap
ConocoPhillips,
Petronas Carigali,
Murphy Sabah Oil
In Operation
1st deep water floating production system - 19 subsea wells.
Came on stream : End of 2011, production of 25,000 bbl./d.
Production will increase to 120,000 bbl./d after new floating
production system is commissioned
Natural gas produced along the oil is re-injected into the
reservoir - improves oil recovery.
Malikai,
Offshore
Sabah
Holds a production capacity of 60,000 bbl./d.
Under
Development Tied into the Kebabangan Northern Hub development
Shell and
ConocoPhillips
project (KBB) via a liquid and dry gas pipeline after first gas
is drawn from KBB. Expected to come online in the 3rd
Quarter of 2015.
Ties together Gumusut/Kakap, Malikai and Kikeh oil fields.
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Oil Pipelines
• Malaysia – Relatively limited oil pipeline network, relies on
tankers and trucks to distribute products onshore.
• Malaysia’s
main oil pipelines connect oil fields offshore
Peninsular to onshore storage and terminal facilities.
• Peninsular Malaysia: 124-mile Tapis pipeline runs from Tapis
oil field, ends at the Kerteh plant in Terengganu, as does the
145-mile Jerneh condensate pipeline.
Energizing Sustainable Future
Oil Pipelines
• Sabah: The oil pipeline connects offshore oil fields with
the onshore Labuan oil terminal – this network will
expand following the development of the Kebabangan
cluster, Malikai, Gumusut / Kakap and Kikeh oil fields.
• Sarawak
: Several other oil pipelines connecting
offshore fields with the onshore Bintulu oil terminal
Energizing Sustainable Future
Refining, Storage and Transit
• Malaysia – Plans to become a regional oil trading and storage hub
by increasing the country’s refining and storage capacity – due to
rising regional and domestic demand for crude oil and oil products.
• PETRONAS:
Plans to build a RM60 billion Refinery And
Petrochemicals Integrated Development (RAPID) complex in
Pengerang, Johor (End of 2017). This project includes a 300,000 bbl./d
refinery.
• Malaysia’s expansion of its oil terminal and storage capacity : To meet
the growth of oil storage and trading within Asia.
Energizing Sustainable Future
Refining, Storage and Transit Cont.’
• Malaysia’s oil product and crude oil terminals: Located along the eastern coast of
Peninsular Malaysia and offshore as floating storage and production facilities.
• MISC Berhad and Vitol Group: Plans to double the storage capacity at Johor
Terminal (the country’s largest oil terminal) by mid-2014
• Pengerang oil storage terminal: Comes online on 2017
• Sabah Oil and Gas Terminal (SOGT), Kimanis: Receive oil and gas starting 2014
• SOGT – Central hub for hydrocarbon development in offshore Sabah with a
design capacity to process
Crude Oil: 260,000 bbl./d,
Condensates: 77,000 bbl./d
Natural Gas: 1.3 billion cubic feet/day
Energizing Sustainable Future
Source: Facts Global Energy, IHS Global Insight, OGJ, IEA, Petronas, Shell (2013)
Energizing Sustainable Future
Outlook for the Oil and Gas Industry
• Oil and Gas Industry: Continues an important role in Malaysian
economy
Private Investment:
Public Investment:
RM189 billion
RM106 billion
• PETRONAS: Has a 5-years RM300 billion capital expenditure
(CAPEX) plan to reverse declining production
• There is much catch up to do after having spent only RM72 billion
(24% of the amount) between 2011 and January 2013.
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Outlook cont.’
• PETRONAS started the year with a five-years umbrella contract
awarded to four engineering services contractors
Technip
Consultant
(M) Sdn Bhd,
Perunding
Ranhill Worley
Sdn Bhd, RNZ
Integrated (M)
Sdn Bhd and
MMC Oil &
Gas
Engineering
Sdn Bhd.
• Contract scope: Domestic upstream oil and gas engineering services
(front end engineering design and detailed design works)
• Growth for oil production is set to outpace consumption due to positive
demand for oil within the Asian region.
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NKEA OIL AND GAS SECTOR:
GROW
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GAS – THE RISING SUN OF ENERGY
• Globally, conventional recoverable gas resources:
• More than 120 years of current global consumption
• Total recoverable resources: Can sustain current production level
(for more than 250 years)
• In the Southeast Asia Energy Outlook 2013 report:
• Gas production in SE Asia will rise from 203 to 260 billion m3
(from 2011 to 2035)
• Main Contributors: Indonesia, Malaysia and Myanmar.
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GAS – THE RISING SUN OF ENERGY (Contd.)
• Malaysian gas production (2011): 56 billion m3 (2nd largest in ASEAN region)
• Offshore Peninsular Malaysia Production: To satisfy domestic demand;
• Offshore Sarawak Production: 33 billion m3 feeds the Malaysia LNG (Bintulu)
liquefaction terminal
• Strong prospects of continued exports of gas in the medium term:
Backed by recent discoveries and new developments, the gas terminal will
operate at full capacity (through at least 2018).
• The country’s gas production is projected:
Will reach 70 billion m3 in 2020, before declining slightly to 65 billion m3 in
2035.
Energizing Sustainable Future
LNG Prospectus
• LNG : Meet the growing demand for efficient, cleaner and
greener energy from environmentally conscious energy
consumers in Asia.
• LNG
currently contributes about 10% of the energy
requirements in Asia and the share is expected to rise to
14% by 2035 (Source: IEA)
• The Oil & Gas industry: Responding to this new challenge by
aiming to supply more LNG to energy hungry countries in
Asia.
Energizing Sustainable Future
LNG Prospectus Cont.
• PETRONAS: Embarking on new projects to increase
its LNG output in the coming years through project
expansion and acquisition.
• The company will build new LNG production facilities
including
• PETRONAS LNG 9 (Train 9) project within the
PETRONAS LNG Complex in Bintulu;
• Floating LNG projects offshore Bintulu.
Energizing Sustainable Future
LNG Prospectus Cont.
• PETRONAS’
subsidiary company, Malaysia LNG Sdn Bhd.
(MLNG) and which operates the PETRONAS LNG Complex:
working on 8 new capital projects to increase the plant’s
production capacity and reliability.
• These projects include
MARLIN project (MLNG boil off gas re-liquefaction project)
MLNG Boiler Rejuvenation project (MBR)
MLNG Dua Rejuvenation project
CO2 Removal Capacity Restoration project
MLNG New Boiler project
ROSE project and Industrial Effluent Treatment System Upgrade
Energizing Sustainable Future
LNG prospectus Cont.
• MLNG:
• Production of 29.8 Million Tonnes Per Annum (MTPA) of LNG by
2016 (increase of 4.1 MTPA - current production of 25.7 MTPA)
• Additional
output: Train 9 (3.6 MTPA) and MARLIN project (0.5
MTPA), estimated completion in 2016.
• MLNG Dua Rejuvenation project: Ensuring continued safe operation
and sustain the reliability and integrity of MLNG Dua plant for
another 15 years, after 2015.
• MBR:
Rejuvenation of 8 boilers after 30 yrs. of operation (To
improve their reliability and restore their capacity of 380 tonnes each
boiler)
Energizing Sustainable Future
LNG prospectus Cont.
• PETRONAS: Also embarking on a new LNG production facility called the
Floating LNG (FLNG) offshore Bintulu – further monetization of small and
stranded gas fields.
• PETRONAS FLNG1 project : Contribute additional 1.2 MTPA to the LNG
production capacity when completed and commissioned in 2015.
• The second Floating LNG project (FLNG2) will come on stream in 2016, and
will add another 1.5 MTPA.
• As of 2012, the largest importer of MLNG’s production:
Japan
(62%)
Korea
(17%)
Energizing Sustainable Future
Taiwan
(12%)
China
(9%)
Oil and Gas Industry Shining in Sabah
Kinabalu Non
Associated Gas
(KNNAG)
ConocoPhillips
Sipitang Oil and
Gas Development
Corporation
Petronas Carigali
Sdn. Bhd,
Sabah Shell Berhad
Talisman Energy
Murphy Sabah Oil
.Co.Ltd.
Kebabangan
Petroleum
Operating
Company Sdn Bhd
(KPOC)
PETRONAS
Carigali Sdn Bhd
ConocoPhillips,
Sabah Gas Ltd
Shell Energy Asia
Ltd.
M3NERGY
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NKEA OIL AND GAS SECTOR:
DIVERSIFY
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Biofuel Technology
• Renewable fuel sector such as ethanol and biomass
based fuels can expand production activities
• Implementation of Green Technology for sustainable
society
• To complement the conventional oil and gas resource
supply
• Biodiesel production
Energizing Sustainable Future
Challenges with Drop in Oil Prices
• Analysts forecast: Oil prices may not go up to 100 $ per barrel.
• Malaysian Oil and Gas sector:
• Major income generator for Malaysia.
• Resources, assets, projects should be managed effectively
–
reduce the unit production cost to be smaller than market price of
crude oil for better profit margins
• Sanctioned projects – Need to be revisited for redesign, re-negotiated
up to re-bid (if necessary) to save lot of unnecessary cost.
• However, we cannot compromise with items related to safety.
Energizing Sustainable Future
Energizing Sustainable Future
Upstream Challenges
Management
and
Information
Increasing the
production of
liquid fuels
Sources of
Crude Oil
Operational
Challenges
Energy
Demand and
Supply
Environmental
Pollution
Fluctuating
Crude Prices
Economic
Uncertainty
The People
Shortage
Marketing
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Downstream Challenges
Corporate
communication
Distribution
Activities for Oil
Products
Health, Safety and
Environmental
Security
Manpower and
Economy
Refinery
incapability and
the Need for
Expansion
Pricing
The cost of
Services
Business Joint
Ventures
Global Refining
Capacity
Crude Supply
Mechanism
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Moving Forward
• Information Technology (IT) & automatic devices (includes robotics):
Needed to solve challenges in the oil and gas industry.
• The latest technologies for data management, analysis, relaying
and dissemination – ensuring effectiveness in the various value
chains of the oil and gas industry.
• The text based format of XML as well as the structured format of
DBMS – effective documentation of the processes to ensure
appropriate data management.
Energizing Sustainable Future
Moving Forward Contd.
• NKRL (Narrative Knowledge Representation Language):
Express information and set up knowledge base – e.g. monitoring gas
leakages in processing plants by setting up alarm systems and
notifications.
• Other IT state of the art technologies can be used to monitor rig activities
at real time – ensure all round efficiency and overcome challenges.
• The good news: Many key players in the oil industry have begun
leveraging the benefits of IT, but this is not enough.
• Integrated Oil and Gas Companies (IOCs) need to cooperate in upstream
and the downstream sector to ensure efficiency in the entire processes.
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Petroleum Data Integration, Information
and Data Management
• IT industry in oil and gas industry: Developed by the World Wide Web
Consortium (W3C) about a decade ago.
• This technology is called XML (Extensible Markup Language):
• It uses tags and unstructured patterns in developing requisite
data for information dissemination
• Structured so that the information would be readable by both
machines and humans
• XML is the most beneficial method information dissemination
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UMS OIL AND GAS CORPORATION:
EDUCATION PROGRAMMES
AND
RESEARCH COLLABORATIONS
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Education Programs
• UMS Oil and Gas
Corporation offers a whole range of Oil and Gas
Engineering Programmes:
Master of
Engineering in Oil
and Gas
Engineering
Master of Science
in Safety, Health,
Environment and
Quality
Technology
Bachelor of
Engineering Oil
and Gas
Engineering
Diploma in Oil and
Gas Engineering
(Instruments)
Diploma in Oil and
Gas Engineering
(Mechanical)
Diploma in Oil and
Gas Engineering
(Process)
Diploma in Oil and
Gas Engineering
(Utility
Management)
Executive Bachelor
Degree and
Diploma
Programme
Professional /
Competency
courses for the Oil
and Gas Industry
Seminars,
conference,
workshops
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UMS COLLABORATION WITH OIL AND
GAS INDUSTRY
Policymakers
Sabah State
Government
Academic
Collaborators
Herriot -Watt
University, Scotland
Malaysian Public
Works Department
Riam Institute of
Technology
Universidae Nacioal
Timor Lorosa’e (UNTL)
Meta Skills Training
Service
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Oil and Gas Industry
Collaborators
Talisman Malaysia Limited (TML)
Kudat Offshore Oil and Gas Sdn. Bhd.
PETRONAS Chemicals Methanol Labuan
Yayasan Sabah
Tokyo Econet Limited Company (TELC)
Centro Ecotech Energy Technology
(Dongguan) Co.Ltd
Forever Sabah
MIMOS Bhd.
UMS Link-Silver Kris Sdn.Bhd.
Labuan Financial Service Authority
COLLABORATION PROPOSED
Faculty of Engineering UMS is actively doing research in
oil and gas and biofuel technology. UMS offers
collaborations in the following niche areas:
Oil and Gas Engineering
Deepwater
Safety and
Engineering Environment
Integration
studies of
Pipelines
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Enhanced Oil
Downstream
and Gas
Processing
Recovery
EOR Projects at UMS
• Comparative and hybrid methods study between
different methods of EOR by using Prototype EOR model
and simulation.
• Experimental
studies to optimize the CO2 injection
mobility for increasing the volumetric sweep efficiency
percentage of oil recovery.
• RSM, Minitab, Matlab, Hysis, Super Pro, LCA software
shall be used for modeling and simulation of EOR
projects.
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MEOR Projects at UMS
• RSM, Minitab, Matlab, Hysis, Super Pro, LCA software
shall be used for modeling and simulation of MEOR
projects.
• Laboratory investigation of pH, electrical conductivity,
and temperature relationships in Sabah shallow and
deep water
Energizing Sustainable Future
MEOR advantages
• Highly economical,
• Low toxicity,
• biodegradability and biocompatibility,
• selectivity and specificity .
• MEOR therefore, offers good alternative in
improving the recovery of crude oil from reservoir
utilizing microorganisms and their metabolic
products
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MEOR Schematic
Figure: Schematic of MEOR (www.netl.doe.gov).
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MEOR Schematic
Figure: Schematic of Microbial flooding recovery. (www.netl.doe.gov).
Energizing Sustainable Future
Natural Gas Projects at UMS contd.
• REMOVAL OF CARBON DIOXIDE FROM
NATURAL GAS FOR LNG PRODUCTION
• RSM, Minitab, Matlab, Hysis, Super Pro, LCA
software shall be used for modeling and
simulation of MEOR projects.
Energizing Sustainable Future
Collaboration can be proposed through:
Industry attachment
to the students
Employment
opportunities for the
graduates and post
graduates of UMS
Research
Collaboration with
Industry
Consultancy in
Upstream and
Downstream-Based
Industries
Tailor-made
Academic and
Training Courses
relevant to Industry
Incubation Centre for
Technology
Development with
Industry
Energizing Sustainable Future
Final Thoughts
• Sun shining future in Malaysia for Oil and Gas Operations
Sustain –
New Discoveries of Oil
and Gas Reserves
(Offshore and Onshore)
Enhanced Oil Recovery
(Increasing Efficiency
of Oil Production from
Mature Wells)
Grow –
Information
Technology
Development
(Overcome Upstream
and Downstream
Challenges)
Diversify –
Developing Biofuel
Technology to
Complement
Conventional Oil and
Gas Resources
• UMS: A premier human resource development destination
for generating the quality human capital with the
involvement of all the stakeholders for sustainable society.
Sabah is Shining
Keep Smiling
Thanks for your kind attention
Energizing Sustainable Future