Malaysian state-run oil and gas giant Petronas has dished out two front-end engineering and design contracts for a nearshore floating liquefied natural gas project in Sabah, East Malaysia.

Petronas revealed on Wednesday that it had awarded FEED contracts on the project to Italy’s Saipem as well as to a consortium involving Japan’s JGC and South Korea’s Samsung Heavy Industries.

The announcement confirms reports by Upstream last week that the JGC-Samsung consortium and Saipem were set to face off in the FEED competition.

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The FEED competition is expected to take about 10 months to complete, with the winner to be rolled over to the engineering, procurement, construction and commissioning phase, subject to a final investment decision being made, which is expected by the end of 2022.

Petronas claims the nearshore LNG project will be a first of its kind in Malaysia, and will have a minimum capacity of 2 million tonnes per annum.

“The development of Sabah’s first nearshore LNG plant reflects our technological expertise where we continue to innovate modern solutions to monetise gas resources in an optimised and environmental-friendly manner,” said Petronas chief executive of gas and new energy, Adnan Zainal Abidin.

Petronas states the design and construction of the nearshore plant has the potential for improved production uptime as it will be located within a protected bay area as compared to an offshore FLNG facility in the open seas.

It is understood the FLNG vessel used for the Sabah project will be a barge-based floating liquefaction facility moored to a jetty, with the development to also include an onshore substation, a new jetty head and trestle at the jetty of Petronas’ Chemicals Fertiliser facility at the Sipitang Oil & Gas Industrial Park, as well as offshore and onshore pipelines and the FLNG itself.

Upon completion, the nearshore LNG plant will increase Petronas’ LNG production from FLNG facilities from 2.7 million tpa to 4.7 million tpa.

The Malaysian giant currently operates two FLNG vessels — the PFLNG Satu and PFLNG Dua, at the Kebabangan and Rotan offshore gas fields respectively.