Sabah’s first nearshore LNG project gets PETRONAS nod

KOTA KINABALU: Sabah will have one of the world’s largest floating liquefied natural gas (LNG)combined facilities with PETRONAS giving the go-ahead for the first nearshore operations off in Sipitang.

The facility is expected to be fully operational by 2027 with PETRONAS reaching a final investment decision (FID) for the project, according to a joint statement by PETRONAS and the state government.

The engineering procurement, construction and commissioning (EPCC) contract for the project was awarded to the winner of the dual front-end engineering design (FEED) competition in October last year.

Chief Minister Datuk Seri Hajiji Noor said the LNG project is a step in the right direction as the state government pursues more deals for additional revenue through equity participation.

“The nearshore LNG project is the outcome of a joint study between the state government and PETRONAS to identify optimal gas monetisation options to maximise long-term economic spin-offs that will benefit the people,” he said.

The FID and the award of the contract mark another milestone for the project, which will be located at the Sipitang Oil and Gas Industrial Park (Sogip).

It is designed to produce two million tonnes per annum of LNG and reach commercial operation by the second half of 2027.

PETRONAS chief operating officer and executive vice president cum chief executive officer of Gas Business Adnan Zainal Abidin said: “As we transition towards a lower carbon future, PETRONAS continues to advocate for greater use of natural gas.

“We will leverage on our technological expertise for the development of the project to unlock gas resources in an optimised and environmentally-friendly manner.

“PETRONAS remains resolute in supporting the Sabah government’s aspiration for its oil and gas industry.

“The development of the facility under the Sabah Gas Masterplan will strengthen the position of the state and Malaysia as an attractive natural gas hub, contributing to the mutual prosperity of Sabah and the nation,” he said.

The nearshore LNG facility will expand PETRONAS’ global portfolio of LNG assets, strengthening the position of the company among the world’s largest LNG providers.