A group of leading contractors from Asia has secured a contract from the Thai company PTTEP to build a new floating production, storage, and offloading unit (FPSO) for the Kikeh oil and gas field off the coast of Malaysia.

Features of the Kikeh Field

The Kikeh field is Malaysia’s first deepwater oil project, hosting the country’s first deepwater FPSO and its only spar-type platform. The project is located in Block K off the coast of Sabah, East Malaysia, and includes the Kikeh, Siakap North, and Petai fields at depths of around 1,320 meters.

Replacing the Aging FPSO

The field currently operates a large but aging FPSO with a hull nearly 50 years old. Several years ago, PTTEP began the process of replacing this unit. A consortium of India’s Shapoorji Pallonji Energy and Malaysia’s MTC won the tender for the new FPSO for Kikeh. It is expected that a refurbished FPSO will be installed at the site.

The current FPSO contractor at Kikeh is the Malaysian company MISC, whose contract expires in January 2028. After that, the new unit is planned to be commissioned.

Competition and Technical Details

The tender also saw participation from a group comprising Singapore’s HBA Future Energy and Malaysia’s Epoms, but another consortium emerged as the winner. The decision to replace the FPSO was made due to the high cost and technical complexity of overhauling the existing unit.

The new FPSO is expected to be smaller, with a production capacity of 40,000 to 46,000 barrels of oil per day and the ability to process up to 90 million cubic feet of gas daily. Exact specifications for the new FPSO have not yet been confirmed. The current FPSO can produce 120,000 barrels of oil and 150 million cubic feet of gas per day, and has storage for 2 million barrels of oil.

Additional Projects and Production

In 2024, the American company McDermott International received a contract worth up to $50 million for the transportation, installation, and commissioning of a gas lift project at Kikeh. This project will enable gas to be supplied to the subsea production system connected to the Kikeh FPSO.

According to PTTEP’s latest quarterly report, 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 daily production was 8,939 barrels of crude oil and 4 million cubic meters of natural gas. During this period, the project was partially shut down for maintenance.

PTTEP is also conducting geological studies in Block K to assess potential and prepare for future exploration drilling in the offshore area.