Petronas Leads Brunei Gas Field Development

A consortium led by Malaysia's state-run Petronas has firmed up an agreement to spend close to USD 10.3 billion to jointly develop a large-scale natural gas project in Brunei.

The groups plan to drill seven test wells over the next 2 to 3 years to determine the size of the reserves, reports quoting Japan's business daily Nikkei said.

Appraisals carried out earlier pegged the reserves at a few trillion to around 12 trillion cubic feet, making it commercially viable.

Development of the project has been planned to start in 2013, with production to kick off the following year.

The project is expected to produce 500,000 barrels of oil a day and 4 million tons of liquefied natural gas per year, at its peak, which approximately accounts for 6 percent of Japan's total LNG needs, the daily said.

Petronas is the largest stakeholder with a 45 percent interest. Murphy Oil holds a 30% interest in the project with Shell at 12.5 percent and ConcocoPhillips and Mitsubishi each holding a 6.25 percent interest in the 5,000 sq km offshore natural gas block.

Mitsubishi plans to export natural gas from the new field to Japan and may build another liquefaction plant in Brunei, Nikkei said