Shell is preparing to spud its latest exploration well on the MLNG production sharing contract offshore Sarawak, East Malaysia, where a commercial gas discovery could secure future feedstock for the Petronas LNG Complex at Bintulu — one of the world’s largest LNG export facilities at more than 29 million tonnes per annum of capacity.
The well is a wildcat targeting gas in Sarawak’s offshore acreage, with Borr Drilling contracted to provide the jackup rig and Petroleum Sarawak Exploration and Production among the joint venture partners alongside Petronas Carigali. The MLNG PSC has been a core part of Shell’s Malaysian upstream portfolio for decades, historically producing gas piped directly to the Bintulu LNG complex that Shell helped develop in the 1980s and that remains one of Malaysia’s most significant energy export assets.
The drilling campaign is strategically timed. The Rosemari-Marjoram gas field, another Shell-operated development in Sarawak, was targeting start-up in 2026 to supply gas to the Petronas LNG Complex, and the MLNG PSC well adds a further exploration dimension to Shell’s effort to sustain feedstock for Bintulu as existing fields mature. Malaysia’s LNG export programme, which accounts for a significant share of Petronas’s international revenue, depends on a continuous pipeline of new gas discoveries being brought into the Bintulu supply chain to offset natural production decline from the fields that have been supplying the complex since the 1980s and 1990s.
The MLNG PSC well sits within a broader wave of deepwater and shallow-water exploration activity across Sarawak and Sabah that has gained significant momentum in 2026. TotalEnergies is preparing to drill the Jambuk-1 ultra-deepwater wildcat on Block 2K offshore Sabah, targeting a large carbonate prospect near the Megah discovery. Petronas itself is drilling the Megah-2 appraisal well with Noble Corporation’s Noble Viking drillship. Inpex-led Seascape Energy Asia has received partner approval to drill the giant Kertang prospect on Block 2A. The concentration of exploration drilling planned across Malaysian waters in the second half of 2026 and into 2027 reflects renewed confidence in the basin’s prospectivity and the commercial imperative to replace reserves ahead of projected production declines.
For Shell, a successful MLNG PSC discovery would serve a dual purpose. It would add to the company’s Malaysian reserve base at a time when it is managing a structural transition away from its non-operated stakes in the country while maintaining its operated deepwater Sabah and Sarawak positions. And it would provide a direct commercial case for continued investment in the Bintulu complex, whose long-term viability as an LNG export hub depends on new domestic gas supply being confirmed and developed before existing fields are exhausted.
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