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Malikai is the first deep-water Tension-Leg Platform (TLP) in Malaysia and the first Shell TLP outside of the Gulf of Mexico. REUTERS

KUALA LUMPUR: Shell has started oil production from the Malikai Tension-Leg Platform (TLP), located 100-kilometres off the coast of Sabah.

In a statement Wednesday, the company said Malikai is the first deep-water TLP in Malaysia and the first Shell TLP outside of the Gulf of Mexico.

Located in waters up to 500 metres deep, Malikai is Shell’s second deep-water project in Malaysia, following the successful start-up of the Gumusut-Kakap platform in 2014.

Malikai, which is expected to have a peak production of 60,000 barrels per day, is a joint venture between Shell (35 per cent, as an operator), ConocoPhillips Sabah Ltd (35 per cent) and Petronas Carigali Sdn Bhd (30 per cent).

The project features a cost-effective platform design and a unique, industry-first set of risers, or pipes that connect the platform to the wells for oil production, which required fewer drilling materials and lower costs.

Shell Malaysia Chairman Datuk Iain Lo said the Malikai TLP was designed and built in Malaysia, by Malaysians.

"It is a significant demonstration of Shell’s drive for innovation and development of local deep-water capability together with Petronas.

"The safe and successful start-up of Malikai is a highpoint for us, as Shell celebrates 125 years in Malaysia. We will continue to power Malaysia's progress in the energy sector," he added.

Meanwhile, Royal Dutch Shell, Upstream Director, Andy Brown said Malikai marks an important milestone for Shell, its partners, Sabah and Malaysia.

"The project has demonstrated our capability in delivering competitive deep-water projects utilising our global expertise," he said.

Globally, Shell’s deep-water business is a growth priority for the company and currently produces 600,000 barrels of oil equivalent per day (boe/d).

Deep-water production is expected to increase to more than 900,000 boe/d by the early 2020s from already discovered, established reservoirs, according to the statement. - BERNAMA

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