Project Overview and Location

The project is situated off the coast of Sabah, East Malaysia, within Block K. It encompasses the Kikeh, Siakap North, and Petai fields, operating in water depths averaging approximately 1,320 meters. The Kikeh field is notable as Malaysia's first deepwater oil project, hosting the country's first deepwater floating production, storage, and offloading (FPSO) vessel alongside its first and only spar platform.

FPSO Replacement Contract Award

A consortium comprising India's Shapoorji Pallonji Energy and Malaysia's MTC has received a notification of award (NoA) from Thailand's PTTEP for the Kikeh FPSO contract. The winning group is expected to install a converted FPSO at the field. The existing FPSO, owned by MISC, has a hull nearly 50 years old, and its contract expires in January 2028, after which the new floater will be commissioned. Competing bidders included a grouping of Singapore-based HBA Future Energy with Malaysia's Epoms.

Reasons for Replacement

PTTEP opted for a replacement FPSO rather than extending the life of the existing vessel due to the cost and technical complexity of a major refurbishment. The existing hull, almost five decades old, would have required extensive reconditioning, making replacement the preferred outcome.

Specifications and Capacity

The replacement FPSO is expected to be smaller than the existing vessel. Industry sources estimate its production capacity at between 40,000 and 46,000 barrels per day (bpd) of oil, with gas handling of up to 90 million cubic feet per day (MMcfd). In contrast, the existing FPSO can produce 120,000 bpd of oil and 150 MMcfd of gas, with a crude storage capacity of 2 million barrels. The precise floater specification for the new FPSO could not be confirmed.

Related Contracts and Field Operations

In 2024, US contractor McDermott International was awarded a transportation, installation, and commissioning contract valued at up to $50 million for the Kikeh subsea gas lift project. This project will enable gas delivery to a subsea production system tied back to the Kikeh FPSO. Operator PTTEP reported that Block K produces crude oil and natural gas from the Kikeh, Siakap North-Petai (SNP), and Gumusut-Kakap (GK) fields. In the first quarter, average crude oil production was 8,939 bpd, and natural gas production was 4 million cubic meters per day (MMcmd). A partial shutdown for maintenance occurred during this period. PTTEP is also conducting geological studies at Block K to assess potential and prepare for future exploration drilling.