[LNG Prime/ April 2, 2024] South Korea’s Samsung Heavy Industries has officially started building the third floating LNG production unit for Malaysian energy giant Petronas.

The shipbuilder held a steel-cutting ceremony for the FLNG at its yard in Geoje, according to a statement by Petronas issued on March 1.

Pertonas said this event marks the beginning of the construction phase of the project, which will become Malaysia’s first nearshore FLNG facility once in operation.

This third FLNG facility is designed to produce up to 2 million tonnes per annum (MTPA) of LNG and is targeted to start commercial operations by the second half of 2027.  Upon completion, the nearshore FLNG will be moored at the Sipitang Oil and Gas Industrial Park (SOGIP) in Sabah.

Japan’s JGC confirmed in January last year it had won the contract with SHI to build the FLNG for Petronas. SHI and JGC already built the second FLNG, PFLNG Dua, for the Malaysian firm. The nearshore LNG plant will increase Petronas’ LNG production from floating LNG facilities from 2.7 mtpa to 4.7 mtpa.

Currently, Petronas operates two floating LNG facilities, namely the 1.2 mtpa PFLNG Satu as well as the 1.5 mtpa PFLNG Dua, both located offshore Sabah. Petronas delivered 38 LNG cargoes from these two floating LNG producers during 2023, down by 5 cargoes compared to 2022.

The company is currently also working with Argentina’s state-owned oil and gas company YPF on their planned Argentina LNG export project, which includes FLNG units. YPF recently launched a tender for engineering work for the FLNG units.