Malaysia’s Petronas launches Sabah gas development plan

Malaysian energy giant Petronas and the state of Sabah have launched a masterplan that includes the development of a liquefied natural gas (LNG) plant at the Sipitang Oil and Gas Industrial Park.

According to a Petronas statement, the Sabah Gas Masterplan would serve as a “reference for both parties in guiding the way forward for the further development of natural gas in the state.”

The masterplan, which is the result of a joint study between the duo, is a “testament of the collaborative effort between both parties to sustainably pursue the full potential of the domestic natural gas industry,” Petronas said.

It highlights three investment opportunities for Sabah’s natural gas resources.

2 mtpa LNG plant

Petronas said the LNG plant would have a capacity of 2 million tonnes per annum (mtpa).

Also, the LNG facility would provide “opportunities for Sabah to expand its LNG distribution across the state through activities such as the virtual pipeline system, allowing more industrial and commercial businesses to access and utilize natural gas as a cleaner source of energy.”

The Malaysian state-owned firm did not provide any additional information regarding the LNG plant but it is probably related to their recently announced FLNG project.

In December, Petronas awarded two front-end engineering design (FEED) contracts for a nearshore FLNG project in Sabah. This project will have a minimum capacity of 2 mtpa.

Currently, Petronas operates two floating LNG facilities, namely the 1.2 mtpa PFLNG Satu as well as the 1.5 mtpa PFLNG Dua. The two units sit at the Kebabangan and Rotan offshore gas fields, respectively.

Gas supply and marketing

In addition to the LNG plant, Petronas and the state of Sabah agreed on two other developments.

This includes Sabah taking up a “more prominent role in gas marketing and distribution in the state, with 120 MMscfd volume of gas to be made available for development of key industries in the state,” Petronas said.

Petronas said the gas would come from Sabah oil and gas terminal in Kimanis, and Sabah gas terminal in Tuaran.

As part of the masterplan, Sabah Energy and Petronas signed a heads of agreement for the supply of 70 MMscfd of natural gas, as well as the document exchange of a previously signed HOA for 50 MMscfd of natural gas supply, for utilization in Sabah.

The masterplan also highlights a suite of petrochemical derivative options for Sabah to attract investors, based on market needs and future outlook, leveraging on locally available feedstock, Petronas said.

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