Climate Change

19 Jan 2024

McDermott Bags Contract for Kasawari CCS Project in Malaysia

19 Jan 2024  by nairametrics   

McDermott will transport and install an 85-mile pipeline section, a 15,000-metric ton CCS platform jacket, and bridge connecting to the existing central processing platform.
McDermott International Ltd has secured an offshore contract from Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) for the Kasawari Carbon Capture and Storage (CCS) project, located offshore Sarawak in East Malaysia.

Under the scope of the contract, McDermott will transport and install an 85-mile (138-kilometer) pipeline section, a 15,000-metric ton CCS platform jacket, and bridge connecting to the existing central processing platform, the company said in a recent news release. The installation activities will be performed by one of McDermott's heavy-lift and pipelay vessels.

"Set to become one of the largest offshore CCS projects in the world, the Kasawari CCS award showcases the valuable role we have in supporting our clients through the energy transition", Mahesh Swaminathan, McDermott Senior Vice President for Subsea and Floating Facilities, said.

The CCS project, operated by PETRONAS Carigali Sdn Bhd and located in Block SK316 about 124 miles (200 kilometers) off Bintulu, is expected to reduce carbon dioxide volume emitted via flaring by 3.3 million tons of carbon dioxide equivalent annually.

Petronas Carigali, a wholly owned subsidiary of Malaysian state oil firm Petronas, made the final investment decision (FID) for the development of the Kasawari CCS project in November 2022. The project is scheduled to start operations by the end of 2025.

In December 2023, Petronas Carigali signed a memorandum of understanding (MoU) and two technical assistance agreements (TAAs) with PTT Exploration and Production (PTTEP) for two blocks off the coast of Sarawak, Malaysia. The MoU and the TAAs are in relation to the development of PTTEP-operated blocks SK405B and SK410B, Petronas said in an earlier news release.

The MoU covers the scope of the potential evacuation of production from Block SK405B through D35/D21/J4 Production Sharing Contract (PSC) facilities, Post 1976 Balingian PSC facilities and the Bintulu Crude Oil Terminal operated by Petronas Carigali.

According to the release, the first TAA covers the study and design works for Block SK405B fields. The second TAA is for assistance with the engineering design for the potential construction, tie-in works, pipeline and cable crossings of Block SK410B for Lang Lebah’s gas evacuation to the Bintulu Additional Gas Supply Facilities 2, as well as for the potential production and handling of Lang Lebah’s condensate at the Bintulu Integrated Facilities.

Late last year, McDermott said it received a “limited notice to proceed” for an engineering, procurement, construction and installation (EPCI) contract from Shell Trinidad and Tobago Limited for the Manatee gas field development project, located off the east coast of Trinidad and Tobago.

The Manatee project scope is for the design, procurement, fabrication, transportation, installation, and commissioning of a wellhead platform, offshore and onshore gas pipelines, McDermott said in a news release Tuesday. The project is still subject to a final investment decision from Shell.

McDermott describes itself as a premier, fully-integrated provider of engineering and construction solutions to the energy industry. The company in September 2023 entered into a transaction support agreement - with more than 75 percent, in aggregate, of its secured letter of credit providers, funded debt creditors, and equity holders - to initiate a financial restructuring process.


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