KOTA KINABALU – Sabah will stop sending gas from its Sabah Oil and Gas Terminal (SOGT) to neighbouring Sarawak once national energy giant Petronas completes construction of its floating gas processing facility in the north Bornean state, state Local Government and Housing Minister Datuk Seri Masidi Manjun said today.
In December, Sabah and Petronas sealed a new agreement allowing the state to earn increased revenue from its oil and gas reserves through greater participation in the industry and its value chain.
Masidi said under the commercial collaboration agreement (CCA) signed between the state government and Petronas, the national energy firm will set up a floating facility at the Sipitang Oil and Gas Industrial Park (Sogip), about 80km south of the SOGT, to process gas procured from the terminal.
Since 2014, Sabah has sent gas extracted from the SOGT to the Bintulu liquefied natural gas (LNG) plant in Sarawak via the 500km Sabah-Sarawak Gas Pipeline.
“No more (gas) to Bintulu. In the planning, (the new facility will be set up) in a year or two. All the development plans have been briefed to the Sabah government, and I am here to share them with you,” the minister told the Sabah assembly.
“It is time that we claim our rights,” the Karanaan Bersatu rep said to a question from Datuk Seri Shafie Apdal (Senallang-Warisan).
Masidi said Sabah now needs to work towards developing sufficient local expertise to tap the industry’s downstream processing opportunities that will arise through the agreement.
To an earlier question by Datuk Mohamaddin Ketapi (Segama-Bersatu), Masidi said the CCA will allow Sabah to have a greater say, participation and revenue sharing in its oil and gas industry with more opportunities for local firms to engage in upstream, LNG and downstream activities.
The participation of local firms will be facilitated by SMJ Petroleum Sdn Bhd, which was set up following the CCA and is wholly owned by the Sabah government, Masidi said.
“It will collaborate with Petronas and other oil and gas companies to create a conducive investment environment in Sabah, and develop the oil and gas businesses for the interests of the country, Sabah, and the oil and gas industry itself,” the minister said.
Masidi said implementation of the CCA will be monitored by an Annual Strategic Dialogue jointly chaired by the chief minister and Petronas chairman, and a coordination committee, jointly headed by the Sabah state secretary and Petronas vice-president, that will meet quarterly. – The Vibes, March 21, 2022
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