Malaysian national upstream company Petronas Carigali is understood to have delayed to at least early next year the award of a major floating production, storage and offloading vessel required for its Limbayong deep-water oil and gas development off Sabah, East Malaysia.

Project watchers told Upstream that commercial and technical bids for the Limbayong FPSO were submitted in April but the tender process has been delayed on several occasions.

“We were hoping that Petronas would finalise the FPSO award by the third quarter of this year. However, they are believed to be making some design changes and the contract is now expected to be finalised by the first quarter of 2020,” a source close to the tender process told Upstream.

A trio of FPSO contractors earlier this year submitted bids to Petronas.

Malaysia’s Sabah International Petroleum, a pairing of MISC with Yinson, and a consortium of Malaysia’s MTC Group with India’s Shapoorji Pallonji Oil & Gas are believed to be the bidders for the FPSO project.

One source tipped the MISC-Yinson grouping as the front-runner for the prestigious FPSO project, owing to its local expertise. However, a second source claimed that Petronas is yet to arrive at a decision and all three players still stand a fair chance.

Given the requirement for up to 90% local content, it is likely that the floater’s topsides will be fabricated in Malaysia, while the hull conversion is also favoured to be carried out on home soil.

Petronas is said to have earlier shortlisted five yards — Sapura Energy, Malaysia Marine & Heavy Engineering (MMHE), Brooke Dockyard & Engineering Works, Muhibbah Marine Engineering and KKB Engineering subsidiary OceanMight — as potential candidates for the topsides construction work.

While the yard is yet to be finalised by Petronas, MMHE is understood to be the front-runner for carrying out topsides fabrication and the hull’s conversion, working as a sub-contractor with the preferred FPSO contractor, sources said.

The turret mooring system for the FPSO will be provided by one of four competitors — National Oilwell Varco division APL, Bluewater, London Marine or Sofec, sources earlier told Upstream.

Petronas last year issued the Limbayong tender but the bid process has been delayed by several months.

The operator needs a floater to handle 60,000 barrels per day of liquids, including 40,000 bpd of oil, as well as about 17 million cubic feet per day of associated gas.

Later, gas production is expected to increase to as much as 150 MMcfd as non-associated gas starts being exploited. One source put Limbayong’s non-associated gas reserves at around 800 billion cubic feet.

The FPSO is expected to have nameplate storage capacity of 600,000 barrels of crude and be able to inject 75,000 bpd of water.

Petronas wants to charter the FPSO for up to 20 years and has suggested two charter options.

The first involves a firm 12-year charter, followed by likely extensions of three, three and two years.

Under the second scenario, a firm lease period of five years would likely be followed by three five-year optional extensions.

The successful contractor will have up to 26 months from contract award to carry out the engineering, procurement, construction, installation and commissioning (EPCIC) work on the FPSO, with production likely to start in another three years.

The Limbayong project also involves a significant subsea contract, for which a separate tender is being carried out.

Three leading subsea groups are said to be chasing this coveted subsea contract.

Those understood to be battling it out for the integrated combined subsea contract are TechnipFMC, a grouping of Oslo-listed Subsea 7 with OneSubsea, and Italy’s Saipem in a consortium with Norway’s Aker Solutions.

The contract on offer is for the EPCIC of the subsea production system and subsea umbilicals, risers and flowlines required for the deep-water project.

Up to 30 development wells are envisaged to exploit the field, according to consultancy Wood Mackenzie.

Limbayong straddles blocks G, J and R around 120 kilometres off the state of Sabah in water depths of between 900 and 1200 metres.

The current co-venturers are understood to be operator Petronas on 90% and its subsidiary E&P Malaysian Ventures having 10% after a novel contract replaced the prior version that had Shell, as operator, and ConocoPhillips partnering the national upstream company.

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Petronas delays deep-water FPSO award off Malaysia