Akio Miyama – General Manager, JGC Malaysia
JGC’s Akio Miyama highlights the company’s long-term commitment to Malaysia and Petronas, collaborating for over thirty years with Petronas for the Bintulu LNG project. He further discusses JGC’s contribution to the PFLNG2 project and the company’s shift to target more offshore projects as per “New Horizon 2015.”
JGC has collaborated with Petronas in Malaysia since the 1980s. What is the strategic importance of the Malaysian market to JGC’s global portfolio?
JGC is one of the world’s largest lump sum turnkey contractors for energy and petrochemical plants. We have been supporting Malaysia’s hydrocarbon industry since the 1960s when we completed refineries for Shell and ExxonMobil in Port Dickson. Our historic relationship with Petronas started in the late 1970s with our collaboration for their first refinery in Terengganu, followed by all the LNG plants in Bintulu and the second refinery in Malacca. Malaysia is the historically important market, which has provided us with the milestones for the past 40 years.
JGC has shown an exceptional long-standing commitment to Petronas‘ LNG Complex in Bintulu, one of the world’s largest LNG complexes. Can you please explain on your work on this project?
JGC was chosen to construct the first phase of the LNG plant in Bintulu with three trains in the 1980s. We then undertook the second phase with additional three trains in the 1990s, while our collaboration with Petronas was renewed for the third phase with another two trains in early 2000s. As the Petronas LNG Complex was expanded over the past 30 years, JGC grew together with Petronas and accumulated the expertise for EPCC of LNG project to be one of the major LNG contractors. Today we are proud of the fact that those LNG plants that we constructed account for approximately 30 percent of the global LNG production.
In 2011, Petronas decided to add 3.6MMTPA capacity with the ninth train, and in 2013 the company achieved FID for its Train 9 project. Following the successful completion of pre FEED and FEED, JGC did win EPCC contract worth 2 Billion USD equivalent since Petronas valued both our thirty year experience in Bintulu and our attractive price. The project will be completed in Q4 2015, with first production slated for Q1 2016. This Train 9 Project will be the first track LNG project in the world, and we are committed to timely delivery. In addition to the Petronas Train 9 project, in January 2014 JGC was also awarded the rejuvenation work for the train 4 -6 of the MLNG.
Our experience in Bintulu was invaluable in being awarded this project, as this LNG plant has worked well over thirty years, and Petronas has accumulated a clear trust in JGC for liquefaction projects. In 2012, JGC was awarded one of the dual FEED contracts for the PFLNG2, forming a consortium with Samsung Heavy Industries (SHI), and subsequently the EPCIC in early 2014. PFLNG2 is going to be the third FLNG, following Shell’s Prelude and Petronas‘ FLNG1, both awarded to Technip. PFLNG 2 is the first FLNG developed for deep water. As Rotan gas field is in deep water Block H, offshore Sabah, an FLNG vessel was the most economical solution to monetize the field. We want to emphasize the fact that the PFLNG2 project is the first lump sum contract for a Floating LNG project ever—truly exemplifying our project management capabilities as a lump sum turnkey contractor.
Branching out into offshore fields is one of the main tenets of JGC’s “New Horizon 2015.” How has this diversification into offshore impacted your operations in Malaysia?
I hope our work for the FLNG2 project will be the first step for further offshore developments in Malaysia. Our interface with the offshore contractors is to obtain expertise through the FLNG2. With clear offshore growth potential in Malaysia, we would like to collaborate with the players locally. My personal opinion is that we should find partners here in Malaysia to further explore these opportunities.
How have you cultivated your relationship with Petronas, and what learnings has JGC company attained from collaborating with this internationalizing NOC?
Petronas is one of JGC’s best clients, and our team loves Petronas projects since Petronas and JGC act as one team in terms of project execution. Our relationship is one of mutual respect and trust. Petronas has invested heavily domestically since 2011, while Japan has also seen increased energy demand since nuclear power production halted following the Fukushima incident. At this critical juncture, JGC has worked all the more closely with Petronas, completing our projects for Petronas successfully, on time and safely. JGC would also like to follow Petronas wherever they go overseas, since this NOC directs a variety of projects over the world with its determined business plan. Especially for LNG projects, we groomed our expertise and strong points with Petronas in Bintulu. The project managers and project engineers who experienced Bintulu are a major asset to JGC.
In the 1990s, JGC undertook its first GTL project here in Malaysia, working with Shell on their first GTL. How has your involvement in GTL evolved in Malaysia since?
In 1993, we completed the GTL plant in Bintulu for Shell MDS (“SMDS”), which is the first of its kind in the world. After completing the FEED and EPC phases of the project, we have constantly aided Shell with rejuvenation and modification projects at the site. Our subsidiary JGC Singapore is currently executing rejuvenation work for SMDS. Shell has modified and tested new technology at this GTL plant, which they subsequently expanded and commercialized in Qatar in 2011. JGC also acted as the PMC contractor for this Peal GTL project in Qatar. Though oil price is currently very soft, GTL technology represents an interesting solution, when oil price is high.
How does Malaysia serve as a source of innovation for JGC globally?
In Malaysia, one of our key focus areas is supporting Petronas to develop high CO2 and H2S gas fields in a cost-efficient manner. These days more and more gas fields in both Peninsular Malaysia and East Malaysia have higher CO2 and H2S content. We have thus developed a ceramic membrane for CO2 separation in cooperation with a Japanese ceramic’s manufacturer, NGK. As an engineering company, we also work to optimize the technologies created by specific technology providers, and we constantly reinforce our capabilities to meet new challenges in the energy sector.
The RAPID Project has attracted the attention of Japanese companies such as TOYO Engineering, who have been awarded significant contracts recently. How is JGC poised to take advantage of new opportunities created in Malaysia thanks to this mega-project?
Unfortunately, JGC did not bid for the refinery project due to our other commitments in Bintulu. We are now bidding for a petrochemical package and expect a result in Q3 2015.
How has JGC supported Malaysia’s ambition to become an oil and gas hub, and how far do you think Malaysia is from reaching this ambition?
Most of the subcontractors for the Petronas Train 9 project are Malaysian, which would have been difficult 10 or 20 years ago. We also engaged quite a number of vendors and fabricators from Malaysia. This represents a clear example of how Malaysia is advancing in terms of the oil and gas service sector and building the local expertise needed to stand as a hub.
When Malaysian contractors are cost effective and capable, JGC would like to choose local companies. We hope that by collaborating with JGC, these service providers will be able to even further advance their capability. Being committed to local content, we aim to help push Malaysia to become an oil and gas hub through our work with local contractors.
Looking ahead, how would JGC Malaysia’s presence to have evolved in three years time?
JGC would be very interested in working with PETRONAS for projects in Malaysia, especially LNG projects, allowing us to further utilize the expertise we are now accumulating with Train 9 Project and FLNG2 project. Moving forward, we also want to contribute to PETRONAS with the monetization of high CO2 gas field development.