Exxon Starts Production at New Malaysia Gas Field

ExxonMobil's subsidiary in Malaysia has begun natural gas production at the offshore Damar field, preparing Malaysia to boost its current status as the world's third-largest exporter of liquefied natural gas (LNG).

ExxonMobil Exploration and Production Malaysia has announced the startup of natural gas production from Damar field, which lies in 55 m of water about 200 km offshore eastern peninsular Malaysia.

The filed has a projected capacity of 200 million cubic feet of natural gas per day.

The Damar gas field was developed under a production-sharing contract signed by ExxonMobil, Petronas Carigali, and Petronas. ExxonMobil is the project's operator with a 50% interest, while Petronas Carigali holds the other 50%.

Exxon is planning 16 development wells this year at Damar with its joint venture.

Onshore fabrication for the Damar gas project began in November 2012 and was completed in less than a year. Hook-up and commissioning activities were launched in October 2013.

Full well stream gas is being produced via a new 22-kilometre pipeline to the existing Lawit A platform for processing.

According to the US Energy Information Administration (EIA), Malaysia has about 83 trillion cubic feet of proven natural gas reserves and is the third largest in the world in terms of LNG exports, behind Qatar and Indonesia.

The Damar project is expected to provide additional gas supplies to help meet Malaysia's power and industrial needs and promote growth of the country's natural gas industry.

The project follows the previously announced Telok gas development, which began production in March 2013.

"Beyond providing an economical approach to developing smaller fields, our concept shortens construction time substantially and results in significant cost savings," ExxonMobil Exploration and Production Malaysia Chairman and President J. Hunter Farris said in a statement.

By James Burgess