PETROLIAM Nasional Bhd (Petronas) is currently negotiating with Petroleum Sarawak Bhd (Petros) to finalise the Joint Declaration signed on 21 May 2025, with discussions taking longer than expected due to the need to balance commercial principles, mutual interests, and industry sustainability.
Minister in the Prime Minister’s Department for Law and Institutional Reform Datuk Seri Azalina Othman Said said the negotiations aim to create a strategic, inclusive, and equitable framework for long-term cooperation.
“All federal and Sarawak laws relating to gas distribution in the state must coexist and be respected by all parties conducting activities in Sarawak,” she explained.
Azalina emphasised that Petronas must continue its role under the Petroleum Development Act 1974 (Act 144), covering upstream operations to the sale of liquefied natural gas (LNG) to international markets.
“Petros has been appointed as the gas aggregator for Sarawak’s domestic market, effective 1 March 2025. This appointment will be respected and supported by all industry players involved in domestic gas distribution and supply,” she added.
She clarified that all existing and future agreements involving Petronas or its subsidiaries for the sale of LNG, covering upstream to export activities, will remain fully protected, unaffected, and enforceable.
“Petronas continues to pursue a collaborative and negotiated approach to ensure the interests of all stakeholders are preserved, while maintaining the stability and sustainability of Malaysia’s oil and gas industry,” Azalina said.
The minister also noted that domestic natural gas demand in Sarawak for non-LNG markets is expected to rise to 500 million standard cubic feet per day (mmscfd) by year-end, up from an average of 400 mmscfd during 2023–2024.
Petronas remains committed to allocating 1.2 billion standard cubic feet per day (bscfd) to meet Sarawak’s domestic requirements by 2030.
In response to questions from Parliament, Azalina stressed that Petronas channels gas to Sarawak’s downstream industry under commercial terms, rather than selling directly to the state, ensuring that both companies’ roles and responsibilities are clearly defined under the joint framework. - November 11, 2025
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