Nippon Oil Exploration (Malaysia) Ltd. (NOMA), a subsidiary of Japan's largest oil company, Nippon Mitsubishi Oil Corp. (NMOC), on Wednesday consigned a Malaysian firm to build a giant platform substructure in its gas field in the South China Sea.
NOMA signed the 110 million ringgit ($28.95 million) agreement with Malaysia Shipyard and Engineering Sdn. Bhd. (MSE) to construct a 40-story-high substructure at its Helang Gas Field off Sarawak, a Malaysian state on Borneo Island.
MSE is to install the 10,000-ton structure, comprising an eight-legged jacket, piles and conductors, in the gas field by Oct. 1, 2001.
Another firm, to be appointed soon, will build the "integrated topsides," which are to be installed atop MSE's substructure by the second quarter of 2003. NOMA hopes to begin gas production by the fourth quarter of 2003.
Under a production-sharing contract with Malaysia's state-owned oil corporation Petronas, NOMA conducted the exploration project and discovered the gas field in 1990.
It holds a 75 percent equity stake in the gas field and Petronas Carigali Sdn. Bhd., a subsidiary of Petronas, holds the rest.
The Helang Gas Field has an estimated gas reserve of 2 trillion cu. feet.
NOMA will pump an average of 250 million cu. feet per day over a period of 20 years.
The total cost of the Helang gas production platform is estimated at $440 million.
NOMA has obtained a $330 million loan from the Japan Bank for International Cooperation and commercial banks with guarantees by Japan National Oil Corp.
Japan National Oil Corp. is one of the shareholders in NOMA, holding a 45.39 percent stake, NMOC holds 47.24 percent and the remainder is held by Mitsubishi Corp.
At a signing ceremony Wednesday, NOMA President Kazuo Tomita said entering into the construction phase of the project has made NOMA "the first Japanese company to participate in an upstream gas field development project in Malaysia."