Shell said it encountered a gas column measuring 1,476 feet thick while drilling its Rosmari-1 well in deep Malaysia waters.
"With further exploration planned, the finding is a positive indicator of the gas potential in an area of strategic interest for Shell,' the company said in a statement.
Shell has a controlling interest in Rosmari-1 in partnership with Malaysia's state-owned energy company Petronas.
The U.S. Energy Information Administration reports Malaysia has about 83 trillion cubic feet of proven natural gas reserves and is No. 3 in the world in terms of exports of liquefied natural gas behind Qatar and Indonesia.
Exxon Mobil Corp. in February said it started production at the Damar field off the coast of Malaysia, which has a projected capacity of 200 million cubic feet of natural gas per day.