Malaysian-French Engineering for Petronas Projects

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The Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) and France’s Technip SA joint venture have been kept busy with a number of offshore projects in Malaysia and abroad. While domestic projects are carried out at two shipyards in southern Peninsular Malaysia, those for the Caspian Sea are being undertaken at Kiyanly shipyard in Turkmenistan. 

“The renewed focus by Petronas on local exploration & production development, enhanced oil recovery (EOR) initiatives and marginal field developments, will positively impact on our yards as we will be able to capitalize on these future opportunities from a position of strength,” Malaysia Marine and Heavy Engineering Bhd (MHB) Managing Director & CEO Dominique De Soras said in an interview with Rigzone. Malaysia’s national oil and gas company, Petronas Nasional Bhd (Petronas), is investing $91.86 billion (MYR 300 billion) on its projects, including a number of deepwater and EOR projects.

“MHB is bullish of business prospects,” he said. 

MHB, as the listed parent group of MMHE, has upgraded its shipyards to cope with demand for providing high-end engineering projects.

“Over the course of the year, our business performance further improved as tight discipline, process controls and competency enhancements were introduced. Some of the key milestones included long-term agreements with our strategic partners – the subcontractors and vendors – on critical improvements to our framework and pricing,” he said.

The upgrade began with MHB’s October 2010 initial public offer, which raised $658.21 million (MYR 2.03 billion). Technip, with its globally renowned oil and gas expertise, joined MHB as an international strategic investor. Soras was happy with his group’s performance. MHB’s Offshore Business Unit ended 2013 with orders worth $765.5 million (MYR 2.5 billion). He projects more prospects, citing Petronas’ MYR 300 billion commitment for projects to be implemented between 2011 and 2015. Field development in Malaysia would continue from 2016 onwards.

CURRENT PROJECTS IN MALAYSIA

The joint venture is currently working on an engineering, procurement, construction, installation and commissioning (EPCIC) contract for the development of two gas fields in Block SK316. The fields are located around 111.84 miles (180 kilometers) north of Bintulu offshore Sarawak in water depth of 341.2 feet (104 meters). The partners had earlier participated in the front-end engineering design competition with subsequent rollover to EPCIC execution, he said.

The EPCIC contract includes a central processing platform and a bridge-linked wellhead platform, which would be constructed at MMHE’s fabrication yard at Pasir Gudang in the southern Peninsular Malaysian state of Johor. The contract, awarded by Petronas’ upstream unit Petronas Carigali Sdn Bhd, also includes the installation of a 46.6-mile (75-kilometer) pipeline by one of Technip’s pipelay vessels.

The Technip-MMHE joint venture is also the engineering, procurement and construction (EPC) contractor for the Malikai Tension Leg Platform (TLP). The TLP is a fully-manned platform to be installed 68.3 miles (110 kilometers) off Sabah, East Malaysia, in water depth of approximately 1,640 feet (500 meters) for Sabah Shell Petroleum Co Ltd. 

“Both projects have created new performance benchmarks, increasing our credibility as a world-class fabricator,” stressed Soras. “For this year, we will leverage on our strength to accommodate very large and heavy structures up to 55,000 metric tons and continue to support Petronas’ especially in its frontier field development projects,” he said.

MHB yards are currently working on a 26,400 metric ton Malikai topside and TLP hull and 33,100 metric tons-projects for Block SK316.

MHB TRACK RECORD

MHB has completed a number of projects last year, including fabrication and load out of Gumusut Kakap – Asia’s largest semisubmersible floating production system (FPS) – project installed off the coast of Sabah, Soras said with reference to the firm’s achievements. Others included the topside and jacket for Telok B, the topside and jacket for Damar A, F14/F29 topsides, substructure and process module and the OSX-3 turret.

“These project deliveries are a reflection of the successful strategies put in place by the group to strengthen our project management capabilities,” he explained.

To take on larger scale projects, MHB embarked on a yard optimization initiative in April 2012. The firm expanded its yard size and capacity by acquiring new land for the fabrication of offshore oil and gas related structures to cater to EPCIC works. The acquisition raised MHB’s yard capacity from 69,700 metric tons to 129,700 metric tons, resulting in MHB emerging as Malaysia’s largest fabricator in terms of yard size and capacity. The company operates two local yards – MMHE West and MMHE East.

HISTORY OF PARTNERSHIPS

Over the last 40 years (1973-2013), MHB has grown organically while enhancing its capabilities and service offering through strategic partnerships with global leaders such as Technip, Samsung Heavy Industries (SHI) of South Korea and ATB Riva of Italy, Soras noted. 

“We have improved MHB’s offerings to the open, international market through the enhancement of capabilities and the transfer of technology through its partnerships with international engineering groups,” said Soras.

These partnerships with companies who are leaders in their respective fields, include:

  • Samsung (MMHE-SHI LNG Sdn Bhd or MSLNG)
  • Technip (Technip MHB Hull Engineering Sdn Bhd or TMH)
  • ATB (MMHE ATB Sdn Bhd), all of whom are leaders in their respective fields

In addition, MHB has collaborative partnerships as well as strategic cost and pricing frame agreements with key subcontractors and vendors, the MHB CEO pointed out.

CASPIAN SEA FOOTHOLD

Internationally, MHB is focusing on serving projects in the Caspian Sea through Turkmenistan’s Kiyanly yard, which it has been operating and managing since 2007 for Petronas Carigali (Turkmenistan) Sdn Bhd. MMHE-TPGM Sdn Bhd, a joint venture firm between MMHE with Technip Geoproduction (M) Sdn Bhd (TPGM), is providing EPCIC services to Petronas Carigali (Turkmenistan) Sdn Bhd. The Kiyanly yard has executed projects for Turkmenistan Block 1, Phase 1 Gas Full Field Development project. The development included works on the Magtymguly platform, Owez platform, onshore gas terminal, gas condensate & MEG offshore pipelines, onshore gas export pipeline & metering and single buoy mooring system.

Future work for the Kiyanly yard would come from projects led by Petronas in the region, with industry observers noting that the yard operator’s expertise has been built around the Malaysian national oil company’s field development plans. The yard, built and developed by MMHE and TPGM to facilitate construction of offshore platforms for the Turkmenistan Block 1 development, will be the partners’ fabrication base for projects in the Caspian. The joint venture yard, which covers an area of 107.7 acre (43.6 hectare), has a fabrication capacity of up to 25,000 metric tons a year.

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