PETRONAS has finished construction of the Petronas Floating LNG (PFLNG) facility 1, but will defer work on a second vessel after what it called an “extremely difficult 2015”.

Known as the Petronas FLNG (PFLNG) Satu, the facility was formally named at a ceremony held by Petronas, Technip and Daewoo Shipbuilding & Marine Engineering (DSME) at the latter’s Okpo shipyard in South Korea.

Petronas group chief executive Wan Zulkiflee Wan Ariffin said that the floating LNG facility signified a breakthrough achievement not only for the company but also for Malaysia.

“The PFLNG Satu is a testament to the engineering capabilities of Petronas and its partners,” he said.

“Today, we have pushed the boundaries and turned our technological aspirations of having an LNG plant on a floating vessel into reality.”

The PFLNG Satu will be moored at Malaysia’s Kanowit gas field, 180 kilometres offshore Sarawak, and has the capacity to produce 1.2 million tonnes of LNG per year.

DSME chief executive Sung Leep Jung said the project had been a “remarkable experience”.

“This achievement, coupled with HSE record of 17 million hours of no lost time injuries is indeed a significant feat for the partnership,” he said.

The FLNG facility will support Petronas’ global LNG portfolio, paving the way for opportunities to monetise gas resources from remote, marginal and stranded fields, which would otherwise be uneconomical to develop via conventional means.

Petronas said the PFLNG Satu would leave Okpo for its destination during the second quarter of this year.

The news followed the release of Petronas’ 2015 calendar year results, in which the company recorded a profit after tax of 21 billion ringgit – a 56 per cent fall on 2014.

Revenue was also lower, down 25% to 248 billion ringgit, whcih Petronas said was due to a depressed oil price environment and impairments on its assets.

Petronas had seen a 64% drop in profit from its upstream business to 19.6 billion ringgit despite a 3% rise in upstream production from interests in Malaysia, Indonesia and Azerbaijan, while non-cash impairments of 18 billion ringgit were also recorded.

Mr Wan Zulkiflee said Petronas would take its cost optimisation measures to another level in 2016.

“These include additional reduction in [capital expenditure] and [operating expenditure] of 50 billion ringgit over the next four years, starting with 15 billion to 20 billion ringgit in 2016,” said Mr Wan Zulkiflee.

“These cuts will impact some of our capital projects. At this point, we have taken the decision to re-phase the Petronas Floating LNG 2 project, to be commissioned at a later date than originally planned.”

Petronas had also reivewed its business operating model to facilitate higher efficiency levels and robustness in the organisation, resulting in a new organisation structure which would take effect on 1 April.

“I am confident of our internal initiatives laid out to strategically respond to the external challenges,” Mr Wan Zulkiflee said.

“These will navigate Petronas securely through the current downturn, and position us in a more resilient and competitive stead for future growth.”