(Updated)

Petronas, Hess said agreed to amend gas sale agreement

Petronas, Hess said agreed to amend gas sale agreement
-A +A

KUALA LUMPUR (June 7): Petroliam Nasional Bhd (Petronas) and US-based Hess Corp's subsidiary Hess Malaysia are said to have agreed to amendments made to their existing upstream gas sales agreement (UGSA) to include the sale and purchase of gas produced from the North Malay Basin (NMB) oil and gas field located offshore Peninsular Malaysia.

In a statement today, Hess Corp said the UGSA governs the sale and delivery of gas from the NMB project to Petronas and helps Hess Corp meet its supply and sale commitments in Peninsular Malaysia.

Zhiyong Zhao, vice president of Hess Asia, said in the statement: "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 long-standing and successful partnership between Hess, Petronas and the people of Malaysia. We look forward to continuing this fruitful partnership as we further develop the NMB project," he said.

According to Hess Corp's statement, the UGSA amendments for the NMB project involve the PM302 production sharing contract (PSC) to include the sale and purchase of gas produced from the Kangsar field as well as gas produced from any future PM325 PSC field.

Hess Malaysia and Petronas subsidiary Petronas Carigali Sdn Bhd own a 50% stake each in the NMB project, according to Hess Corp.

"The NMB project, comprising PM302 and PM325 PSCs, is a long-life natural gas asset consisting of 10 discovered natural gas fields with an estimated gross recoverable resource of more than 1.5 trillion cubic feet of natural gas and more than 20 million barrels of condensate.

"The Kangsar natural gas field located offshore Peninsular Malaysia was discovered in 2018 and is part of the recently sanctioned NMB phase 4A development, with first gas targeted in the third quarter of 2022. Hess Malaysia and Petronas Carigali signed a heads of agreement last year to unitise the field for development. 

"Hess Malaysia is currently in phase 2 of the NMB development. The drilling programme for phase 3 is expected to commence in the third quarter of this year with first gas planned in the first quarter of 2022," Hess Corp said.

At the time of writing, Petronas had not issued a statement in response to Hess Corp's statement.