Oil and Gas
2025 Global Review +: Brunei OKs First Deepwater Gas Development Project
US contractor McDermott is awarded key EPC and installation contract for nearly $1.4B South Asia project
McDermott International equipment and services will enable engineering, procurement, construction, installation and commissioning of a large gas development in 150-meter deep water 75 miles off the coast of Brunei in southeast Asia.
Houston-based offshore contractor McDermott International won a contract from a unit of Malaysia government-owned energy firm Petronas for engineering, procurement, construction, installation and commissioning of a subsea natural gas development project 75 miles off the coast of Brunei on the island of Borneo. The contractor describes the Kelidang project as “one of the country's most significant conventional gas projects” and the first in deep water of about 150 meters.
No contract value was disclosed, but reports estimate it at “up to $1 billion” and the development investment at nearly $1.4 billion, with final investment approved in November. McDermott's award follows its front-end engineering and design work for the project, it says.
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Under the contract scope, the company will provide services for a subsea production system and associated infrastructure, including umbilicals, raisers and flowlines, to connect six wells to a floating production unit for natural gas recovery. It will also provide services for a gas export pipeline that will supply feedstock to Brunei's liquefied natural gas sector. The project would have daily gas processing capacity of 450 million cu ft.
McDermott's engineering center in Kuala Lumpur, Malaysia will lead project management, said Mahesh Swaminathan, senior vice president. MISC, a unit of Petronas and a leading Malaysian maritime contractor, also is working on the project. Petronas will operate the project and has a 45% stake. Additional stakeholders include Murphy Oil, Shell, Mitsubishi Corp. and Brunei National Petroleum Co. Commercial production is set to begin by about 2030.
Brunei’s economy grew 4.2% in 2024, with similar expectation for 2025, and oil and gas revenue key to that growth, said a recent University of Brunei report. “While the share of upstream exports has declined, this has been largely offset by growth in oil and gas and chemical-related products,” it said. The share of fuel exports fell from 95.2% to 80% between 2010 and 2022, while chemical product exports grew from 1% to 17.5%. “Strategically diversifying into these … for export is both profitable and sustainable,” the report said.
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$2B
Final investment decision amount for Gorgon 3 offshore gas development project in western Australia approved by energy firm Chevron and partners on Dec. 4. It will link two offshore gas fields to Barrow Island gas gathering infrastructure and LNG production facilities.
Source: Chevron Australia
Next Canada LNG Export Site Could Start Work
Construction of the proposed Ksi Lisims LNG export terminal in Prince Rupert, B.C.—initially estimated at $10 billion and set to be Canada’s second such facility—could start in 2026 after Canada Prime Minister Mark Carney said it would be added to a list of national infrastructure projects being fast-tracked to boost the economy.
Set to be a two-structure, low-carbon floating LNG facility with a planned 12 million metric ton-per-year capacity when operating in 2028-29, Ksi Lisims is a joint venture of U.S. and Canada natural gas producers and the Nisga'a First Nation, and is set to issue a final investment decision early next year.
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Contractors include Black & Veatch for front-end engineering; Samsung Heavy Industries for construction; Siemens Energy for electrical systems; and Ledcor for early site work. Bechtel is pipeline contractor for the up to 560-mile Prince Rupert Gas Transmission pipeline that will carry gas from northeast British Columbia to the site, also on the fast-track list.
But both projects have faced opposition from environmental groups and First Nations tribes.
KSI Lisims follows startup this year of the 14-million ton-per-year LNG Canada export facility, also in British Columbia.
