Sabah To Acquire 25 Pct Equity In Petronas ZLNG Facility - Hajiji
KOTA KINABALU, July 17 (Bernama) -- The Sabah government, through SMJ Energy Sdn Bhd has signed a head of agreement (HoA) with Petronas LNG Sdn Bhd to acquire 25 per cent equity stake in the US$3.1 billion (RM13.17 billion) nearshore floating liquefied natural gas (ZLNG) facility in Sipitang.
The ZLNG, currently under construction, is expected to commence operations in the second half of 2027.
Chief Minister Datuk Seri Hajiji Noor said the partnership marks another significant milestone in advancing Sabah’s long-term development goals, which include promoting industrial growth, enhancing energy security, and creating new opportunities to drive the state’s progress.
“Through strategic investments such as ZLNG, we will strengthen the state’s economic resilience while ensuring that the benefits of Sabah’s natural resources directly contribute to the well-being of our people,” he said in a statement today.
Hajiji and Petroliam Nasional Bhd (Petronas) group president and chief executive officer Tan Sri Tengku Muhammad Taufik witnessed the signing of the HoA at the Malaysia Petroleum Club today.
The Chief Minister noted that the ZLNG facility with a capacity of two million tonnes per annum (MPTA), represents a significant addition to Malaysia’s LNG landscape.
He said the project complements Sabah’s growing LNG footprint, alongside two other floating LNG facilities – PFLNG1 (1.2 MTPA) and PFLNG2 (1.5 MTPA) – currently operating in Sabah waters.
The state government also announced its intention to acquire a 40 per cent participating interest in PFLNG1 through SMJ Energy, with due diligence scheduled to begin in the second half of 2025.
He said SMJ Energy’s growth trajectory since the signing of the commercial collaboration agreement (CCA) with Petronas in December 2021 has been rapid.
The company now holds 50 per cent equity stake in the Samarang production sharing contract (PSC) oil production asset, 10 per cent equity in LNG9, 25 per cent equity in the Sabah Ammonia Urea (SAMUR) petrochemical complex, and full ownership of Sabah International Petroleum (SIP), which operates both Floating Production Storage and Offloading (FPSO) and floating storage and offloading (FSO) assets.
SMJ Energy also holds free carry and back-in rights in exploration blocks SB409 (20 per cent), SB403 (20 per cent), SB306A (15 per cent) and SB306B (15 per cent).
Meanwhile, SMJ Energy chief executive officer Datuk Dr Dionysia Kibat said: “We are a prudent financial investor with a disciplined approach to portfolio building. Our entry into ZLNG is part of our strategic plan to further diversity and strengthen our position in the upstream, LNG, and petrochemical sectors.
“This opportunity aligns with our mandate to generate a long-term, stable cash flows from high-quality, cash-generating assets,” she said.
Sabah’s downstream ambitions are also advancing rapidly. Sabah Energy Corporation (SEC), the state’s gas aggregator and distributor, plays a crucial role in ensuring a stable domestic gas supply for Sabah’s industries.
One of the landmark projects involves supplying gas to E-Steel’s RM31 billion green steel plant at the Sipitang Oil and Gas Industrial Park (SOGIP), a key investment supporting Sabah’s move toward industrial diversification.
-- BERNAMA