Energizing Sustainable Future “Oil and Gas Engineering- Key to a Sunrise Industry in Sabah from an...

Professor. Dr. Pogaku Ravindra

Ms. Adriana Amaludin

Energizing Sustainable Future

“Oil and Gas Engineering- Key to a Sunrise Industry in

Sabahfrom an Academic

Perspective”

Flow of Thoughts

•Upstream, Midstream and Downstream Operations

•Recent Trends in Oil and Gas Sector in Malaysia

•NKRA in Oil and Gas – Sustain, Grow and Diversify

•UMS Education Programmes and Research Projects

•Collaboration with StakeholdersEnergizing Sustainable Future

The Scope of Energy Oil & Gas

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Upstream Activities : Exploration, Drilling, Completion & Production

• Exploration– Seismic– Exploratory Drilling

• Appraisal– Appraisal Drilling– Well Testing

• Field Development– Dev. Drilling– Reservoir– Production– Facilities

• Work over / EOR/EGR

•Refining/Processing/Treatments–Petrol, diesel, kerosene, grease,

bitumen–Gases: ethane, propane, butane

•Petrochemicals–Plastics, synthetic rubber, solvents

•Transmission/Distribution•Marketing•Consumer Products Manufacturing•Services•Others

Downstream Activities : Processing, Treatment & Marketing


Recent Trends in Oil and Gas Sector in Malaysia

•Malaysia produces 2% of the world’s natural gas

• Accounts for about 13% of the world's Liquefied Natural Gas (LNG) exports

• Sold largely to Japan, South Korea and Taiwan

•Malaysia : 3rd largest in the Asia Pacific region (After China & India)

• As a net exporter of oil and gas, 40% of Malaysia’s total revenue derived from petroleum sources.


National Key Economic Areas(NKEA) Five major growth spots of Oil and

Gas


Regional oil storage and trading hub

Innovative approaches in

developing marginal fields

Intensifying domestic

exploration activities

Enhanced Oil recovery (EOR)

initiatives

Refinery And Petrochemicals Integrated Development Project (RAPID) in Pengerang, Johor and

several major downstream petroleum and petrochemical

projects.


NKEA OIL AND GAS SECTOR:SUSTAIN


New Oil and Gas Discoveries


Date Resource

Quantity Location JV

Jan 2013

Oil and Gas

Initial flows: 440 bbl./d crude oil,11.5 MM cf./d natural gas

Adong Kecil West-1 well in Block SK333, onshore Sarawak

JX Nippon Oil & Gas Exploration (Onshore Sarawak) Limited and PETRONAS Carigali Sdn Bhd.

April 2013

Natural Gas

1.5-3 trillion cubic feet of gas (Est.)

B-14 well, Block SK310, onshore Sarawak

Newfield Exploration Company, Partners Diamond Energy Sarawak and Petronas Carigali Sdn Bhd.

May 2013

Oil 200 million stock tank barrels (MMstb)

Cendor Graben-2, Block PM304, Offshore Peninsular Malaysia

Petrofac (Malaysia PM304) Ltd, Petronas Carigali Sdn Bhd, Kuwait Foreign Petroleum Exploration Company and Petro Vietnam Exploration Production Corporation Ltd.

Nov 2013

Gas 247 metres of gas column

Pegaga-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak

PETRONAS Carigali Sdn Bhd and Mubadala Petroleum

Dec 2013

Gas 292 metres of gas column

Sintok-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak

PETRONAS Carigali Sdn Bhd and Mubadala Petroleum

Marginal Oil Fields Development

• PETRONAS - Initiated Risk Sharing Contracts (RSC) for Marginal Oil Fields development

• Marginal Oil Fields Development – Aims to rejuvenate the oil and gas industry, since majority of Malaysian oil fields are entering the mature phase

•Mature phase: Declining oil and gas extraction, after 30 years of exploration and production (E&P)

• Malaysia has around 106 marginal fields, with approx. 580 million barrels of oil.


Enhanced Oil Recovery (EOR)

Energizing Sustainable FutureSource:drillinginfo.com

Enhanced Oil Recovery (EOR)• 50% of Malaysia’s producing oil fields have EOR potential

(Estimated)

• Currently, more than 10 EOR projects in the pipeline at various maturation stages.

• Since Sept 2014, EOR implemented at Tapis oil field (Offshore Terengganu)

• This project, worth RM10 billion – boost declining production between 25,000 to 35,000 barrels per day (bbl./d) in 2016 and between 3,000 to. 4,000 bbl./d in 2017.

• Tapis is one of seven mature fields offshore Peninsular Malaysia, developed by ExxonMobil and PETRONAS via 25-years PSC

• Work is being carried out on seven fields: Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tebu and Palas


EOR cont.’• Shell and PETRONAS agreed to invest $12 billion over 30 years in two EOR projects offshore Sarawak and Sabah (Baram Delta and North Sabah) covering nine fields.

• Expected to boost reserves by 750 million barrels and use the world’s first offshore, chemical injection process for resource recovery


Deepwater Projects


Source: Frost and Sullivan

Deepwater Projects


Location

JV Status Remark

Kikeh Oil Field

Murphy Oil and Petronas Carigali

In Operation

Recoverable reserve base: 400 to 700 million barrels of oil. Production plateau: 120,000bpd for the first 8 years

Gumusut / Kakap

Shell (operator), ConocoPhillips, Petronas Carigali, Murphy Sabah Oil

In Operation

1st deep water floating production system - 19 subsea wells. Came on stream : End of 2011, production of 25,000 bbl./d.Production will increase to 120,000 bbl./d after new floating production system is commissionedNatural gas produced along the oil is re-injected into the reservoir - improves oil recovery.

Malikai, Offshore Sabah

Shell and ConocoPhillips

Under Development

Holds a production capacity of 60,000 bbl./d. Tied into the Kebabangan Northern Hub development project (KBB) via a liquid and dry gas pipeline after first gas is drawn from KBB. Expected to come online in the 3rd Quarter of 2015.Ties together Gumusut/Kakap, Malikai and Kikeh oil fields.

Oil Pipelines•Malaysia – Relatively limited oil pipeline network,

relies on tankers and trucks to distribute products onshore.

•Malaysia’s main oil pipelines connect oil fields offshore Peninsular to onshore storage and terminal facilities.

• Peninsular Malaysia: 124-mile Tapis pipeline runs from Tapis oil field, ends at the Kerteh plant in Terengganu, as does the 145-mile Jerneh condensate pipeline.


Oil Pipelines

• Sabah: The oil pipeline connects offshore oil fields with the onshore Labuan oil terminal – this network will expand following the development of the Kebabangan cluster, Malikai, Gumusut / Kakap and Kikeh oil fields.

• Sarawak : Several other oil pipelines connecting offshore fields with the onshore Bintulu oil terminal


Refining, Storage and Transit• Malaysia – Plans to become a regional oil trading and

storage hub by increasing the country’s refining and storage capacity – due to rising regional and domestic demand for crude oil and oil products.

• PETRONAS: Plans to build a RM60 billion Refinery And Petrochemicals Integrated Development (RAPID) complex in Pengerang, Johor (End of 2017). This project includes a 300,000 bbl./d refinery.

• Malaysia’s expansion of its oil terminal and storage capacity : To meet the growth of oil storage and trading within Asia.


Refining, Storage and Transit Cont.’• Malaysia’s oil product and crude oil terminals: Located along the

eastern coast of Peninsular Malaysia and offshore as floating storage and production facilities.

• MISC Berhad and Vitol Group: Plans to double the storage capacity at Johor Terminal (the country’s largest oil terminal) by mid-2014

• Pengerang oil storage terminal: Comes online on 2017

• Sabah Oil and Gas Terminal (SOGT), Kimanis: Receive oil and gas starting 2014

• SOGT – Central hub for hydrocarbon development in offshore Sabah with a design capacity to process


Crude Oil: 260,000 bbl./d,Condensates: 77,000 bbl./dNatural Gas: 1.3 billion cubic

feet/day

Source: Facts Global Energy, IHS Global Insight, OGJ, IEA, Petronas, Shell (2013)Energizing Sustainable Future

Outlook for the Oil and Gas Industry

• Oil and Gas Industry: Continues an important role in Malaysian economy

• PETRONAS: Has a 5-years RM300 billion capital expenditure (CAPEX) plan to reverse declining production

• There is much catch up to do after having spent only RM72 billion (24% of the amount) between 2011 and January 2013.


Private Investment:RM189 billion

Public Investment: RM106 billion

Outlook cont.’

• PETRONAS started the year with a five-years umbrella contract awarded to four engineering services contractors

• Contract scope: Domestic upstream oil and gas engineering services (front end engineering design and detailed design works)

• Growth for oil production is set to outpace consumption due to positive demand for oil within the Asian region.


Technip Consultant

(M) Sdn Bhd,

Perunding Ranhill

Worley Sdn Bhd, RNZ

Integrated (M) Sdn Bhd and

MMC Oil &

Gas Engineering Sdn Bhd.

NKEA OIL AND GAS SECTOR:GROW


GAS – THE RISING SUN OF ENERGY

• Globally, conventional recoverable gas resources:

• More than 120 years of current global consumption

• Total recoverable resources: Can sustain current production level (for more than 250 years)

• In the Southeast Asia Energy Outlook 2013 report:

• Gas production in SE Asia will rise from 203 to 260 billion m3 (from 2011 to 2035)

• Main Contributors: Indonesia, Malaysia and Myanmar.


GAS – THE RISING SUN OF ENERGY (Contd.)

• Malaysian gas production (2011): 56 billion m3 (2nd largest in ASEAN region)

• Offshore Peninsular Malaysia Production: To satisfy domestic demand;

• Offshore Sarawak Production: 33 billion m3 feeds the Malaysia LNG (Bintulu) liquefaction terminal

• Strong prospects of continued exports of gas in the medium term:

Backed by recent discoveries and new developments, the gas terminal will operate at full capacity (through at least 2018).

• The country’s gas production is projected:

Will reach 70 billion m3 in 2020, before declining slightly to 65 billion m3 in 2035.


LNG Prospectus

• LNG : Meet the growing demand for efficient, cleaner and greener energy from environmentally conscious energy consumers in Asia.

• LNG currently contributes about 10% of the energy requirements in Asia and the share is expected to rise to 14% by 2035 (Source: IEA)

• The Oil & Gas industry: Responding to this new challenge by aiming to supply more LNG to energy hungry countries in Asia.


LNG Prospectus Cont.•PETRONAS: Embarking on new projects to increase its LNG output in the coming years through project expansion and acquisition.

•The company will build new LNG production facilities including

•PETRONAS LNG 9 (Train 9) project within the PETRONAS LNG Complex in Bintulu;

•Floating LNG projects offshore Bintulu.


LNG Prospectus Cont.• PETRONAS’ subsidiary company, Malaysia LNG

Sdn Bhd. (MLNG) and which operates the PETRONAS LNG Complex: working on 8 new capital projects to increase the plant’s production capacity and reliability.

• These projects include


MARLIN project (MLNG boil off gas re-liquefaction project) MLNG Boiler Rejuvenation project

(MBR)MLNG Dua Rejuvenation projectCO2 Removal Capacity Restoration projectMLNG New Boiler projectROSE project and Industrial Effluent Treatment

System Upgrade

LNG prospectus Cont.• MLNG:

• Production of 29.8 Million Tonnes Per Annum (MTPA) of LNG by 2016 (increase of 4.1 MTPA - current production of 25.7 MTPA)

• Additional output: Train 9 (3.6 MTPA) and MARLIN project (0.5 MTPA), estimated completion in 2016.

• MLNG Dua Rejuvenation project: Ensuring continued safe operation and sustain the reliability and integrity of MLNG Dua plant for another 15 years, after 2015.

• MBR: Rejuvenation of 8 boilers after 30 yrs. of operation (To improve their reliability and restore their capacity of 380 tonnes each boiler)Energizing Sustainable Future

LNG prospectus Cont.• PETRONAS: Also embarking on a new LNG production facility

called the Floating LNG (FLNG) offshore Bintulu – further monetization of small and stranded gas fields.

• PETRONAS FLNG1 project : Contribute additional 1.2 MTPA to the LNG production capacity when completed and commissioned in 2015.

• The second Floating LNG project (FLNG2) will come on stream in 2016, and will add another 1.5 MTPA.

• As of 2012, the largest importer of MLNG’s production:


Japan (62%)

Korea (17%)

Taiwan (12%)

China (9%)

Oil and Gas Industry Shining in Sabah


Kinabalu Non Associated Gas

(KNNAG)ConocoPhillips

Sipitang Oil and Gas

Development Corporation

Petronas Carigali Sdn.

Bhd,

Sabah Shell Berhad

Talisman Energy

Murphy Sabah Oil .Co.Ltd.

Kebabangan Petroleum Operating

Company Sdn Bhd (KPOC)

PETRONAS Carigali Sdn

Bhd

ConocoPhillips, Sabah Gas Ltd

Shell Energy Asia Ltd. M3NERGY

NKEA OIL AND GAS SECTOR:DIVERSIFY


Biofuel Technology

•Renewable fuel sector such as ethanol and biomass based fuels can expand production activities

• Implementation of Green Technology for sustainable society

• To complement the conventional oil and gas resource supply

•Biodiesel productionEnergizing Sustainable Future

Challenges with Drop in Oil Prices• Analysts forecast: Oil prices may not go up to 100 $ per barrel.

• Malaysian Oil and Gas sector:

• Major income generator for Malaysia.

• Resources, assets, projects should be managed effectively – reduce the unit production cost to be smaller than market price of crude oil for better profit margins

• Sanctioned projects – Need to be revisited for redesign, re-negotiated up to re-bid (if necessary) to save lot of unnecessary cost.

• However, we cannot compromise with items related to safety.



Upstream Challenges


Management and

Information

Increasing the

production of liquid

fuels

Sources of Crude Oil

Operational Challenges

Energy Demand

and Supply

Environmental Pollution

Fluctuating Crude Prices

Economic Uncertainty

The People Shortage Marketing

Downstream Challenges


Business Joint Ventures

Global Refining Capacity

Corporate communicatio

n

Distribution Activities for Oil Products

Crude Supply Mechanism

Health, Safety and

Environmental Security

Manpower and Economy

Refinery incapability

and the Need for Expansion

Pricing The cost of Services

Moving Forward

• Information Technology (IT) & automatic devices (includes robotics): Needed to solve challenges in the oil and gas industry.

• The latest technologies for data management, analysis, relaying and dissemination – ensuring effectiveness in the various value chains of the oil and gas industry.

• The text based format of XML as well as the structured format of DBMS – effective documentation of the processes to ensure appropriate data management. Energizing Sustainable Future

Moving Forward Contd.• NKRL (Narrative Knowledge Representation Language):

Express information and set up knowledge base – e.g. monitoring gas leakages in processing plants by setting up alarm systems and notifications.

• Other IT state of the art technologies can be used to monitor rig activities at real time – ensure all round efficiency and overcome challenges.

• The good news: Many key players in the oil industry have begun leveraging the benefits of IT, but this is not enough.

• Integrated Oil and Gas Companies (IOCs) need to cooperate in upstream and the downstream sector to ensure efficiency in the entire processes.


Petroleum Data Integration, Information and Data Management • IT industry in oil and gas industry: Developed by the

World Wide Web Consortium (W3C) about a decade ago.

• This technology is called XML (Extensible Markup Language):

• It uses tags and unstructured patterns in developing requisite data for information dissemination

• Structured so that the information would be readable by both machines and humans

• XML is the most beneficial method information disseminationEnergizing Sustainable Future

UMS OIL AND GAS CORPORATION:

EDUCATION PROGRAMMES AND RESEARCH COLLABORATIONS


Education Programs

• UMS Oil and Gas Corporation offers a whole range of Oil and Gas Engineering Programmes:


Master of Engineering in

Oil and Gas Engineering

Master of Science in

Safety, Health,

Environment and Quality Technology

Bachelor of Engineering Oil and Gas Engineering

Diploma in Oil and Gas

Engineering (Instruments)


Engineering (Mechanical)


Engineering (Process)


Engineering (Utility

Management)

Executive Bachelor

Degree and Diploma

Programme

Professional / Competency courses for the Oil and

Gas Industry

Seminars, conference, workshops

UMS COLLABORATION WITH OIL AND GAS INDUSTRY


Sabah State GovernmentMalaysian Public Works Department

Policymakers

Herriot -Watt University, ScotlandRiam Institute of TechnologyUniversidae Nacioal Timor Lorosa’e (UNTL)Meta Skills Training Service

Academic Collaborators

Talisman Malaysia Limited (TML)Kudat Offshore Oil and Gas Sdn. Bhd.PETRONAS Chemicals Methanol LabuanYayasan SabahTokyo Econet Limited Company (TELC)Centro Ecotech Energy Technology (Dongguan) Co.LtdForever SabahMIMOS Bhd.UMS Link-Silver Kris Sdn.Bhd.Labuan Financial Service Authority

Oil and Gas Industry Collaborators

COLLABORATION PROPOSED

Faculty of Engineering UMS is actively doing research in oil and gas and biofuel technology. UMS offers collaborations in the following niche areas:


Oil and Gas Engineering

Deepwater Engineerin

g

Safety and Environme

nt

Integration studies of Pipelines

Enhanced Oil and

Gas Recovery

Downstream

Processing

EOR Projects at UMS

•Comparative and hybrid methods study between different methods of EOR by using Prototype EOR model and simulation.

• Experimental studies to optimize the CO2 injection mobility for increasing the volumetric sweep efficiency percentage of oil recovery.

•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of EOR projects.


MEOR Projects at UMS

•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects.

• Laboratory investigation of pH, electrical conductivity, and temperature relationships in Sabah shallow and deep water


MEOR advantages

•Highly economical,

• Low toxicity,

•biodegradability and biocompatibility,

•selectivity and specificity .

•MEOR therefore, offers good alternative in improving the recovery of crude oil from reservoir utilizing microorganisms and their metabolic products


MEOR Schematic


Figure: Schematic of MEOR (www.netl.doe.gov).

MEOR Schematic


Figure: Schematic of Microbial flooding recovery. (www.netl.doe.gov).

Natural Gas Projects at UMS contd.

•REMOVAL OF CARBON DIOXIDE FROM NATURAL GAS FOR LNG PRODUCTION

•RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects.


Collaboration can be proposed through:

Industry attachment to the students

Employment opportunities for

the graduates and post

graduates of UMS

Research Collaboration with Industry

Consultancy in Upstream and Downstream-

Based Industries

Tailor-made Academic and

Training Courses relevant to

Industry

Incubation Centre for Technology

Development with Industry


Final Thoughts• Sun shining future in Malaysia for Oil and Gas

Operations

•UMS: A premier human resource development destination for generating the quality human capital with the involvement of all the stakeholders for sustainable society.

Sustain – New Discoveries of

Oil and Gas Reserves (Offshore

and Onshore)Enhanced Oil

Recovery (Increasing

Efficiency of Oil Production from Mature Wells)

Grow – Information Technology

Development (Overcome

Upstream and Downstream Challenges)

Diversify – Developing Biofuel

Technology to Complement

Conventional Oil and Gas Resources

Thanks for your kind attention

Sabah is Shining

Keep Smiling


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