Billions of Barrels at Risk in Southeast Asia Due to Sour Gas

Abstract

Southeast Asia is one of the leading regions globally in terms of planned gas developments in the next decade. We estimate sour gas contamination in Southeast Asian gas discoveries is one of the major challenges delaying over 10 billion barrels of oil equivalent gas resources from coming online. These developments are planned in Malaysia, Indonesia, and Vietnam, requiring around $20 billion of investments, and could potentially make a significant contribution to regional production post-2030. But the fields contain high levels of sour gas, which makes development challenging and costly. Sour gas refers to natural gas that contains significant amounts of acidic gases such as hydrogen sulfide and carbon dioxide (CO2). Some industry majors are moving forward with exploration and development - albeit at a slow pace. Off Malaysia, work on Petronas’ Kasawari, Shell's Rosmari-Marjoram and PTTEP's Lang Lebah fields have been lined up, while Indonesia has witnessed similar slow progress on similar projects operated by IOCs and the government is also hoping the potential of its Natuna D-Alpha field will attract investors. However, as domestic gas demand in the countries increases and output drops, efforts must be made to overcome the complex geology and associated challenges. In fact, globally SE Asia & NW Australia are one of the largest regions with concentrations of sour gas. The paper intends to highlight Southeast Asia's role in planned gas developments globally and the significance of these developments in regional production. We deep dive into the planned developments risked by the sour gas contamination which makes up over 40% of the gas resources planned for development in Southeast Asia by 2030.