Kota Kinabalu: Sabah Economic Development Corporation (Sedco) expects to increase its returns to the Sabah Government to RM25 million this year, following improved financial prospects from the finalisation of land lease agreements with Petronas for the Sabah Oil and Gas Terminal (SOGT) and Sabah-Sarawak Gas Pipeline (SSGP).
Sedco Chairman Datuk Masiung Banah said the projected RM25 million return would comprise dividend payments, loan repayments and direct contributions to the State Government, compared with RM10 million channelled in 2025.
He said the expected improvement in financial performance would be supported by the settlement of outstanding lease payments by Petronas.
“With expectations of better financial performance, supported by the outstanding lease payments to be settled by Petronas, we will be able to increase our returns to the State Government for the current year and next year.
“If we channelled RM10 million in 2025, we are projecting a more significant return of RM25 million in 2026,” he said at the signing ceremony of the Land Lease Agreements for the Sabah Oil and Gas Terminal (SOGT) and Sabah-Sarawak Gas Pipeline (SSGP) projects between the Sabah Economic Development Corporation (Sedco) and Petronas at Hyatt Regency Kinabalu, here, Wednesday.
The agreements cover 32.5 hectares of land for SOGT operations in Kimanis and a 91km pipeline corridor involving 260 hectares for SSGP, which transports gas from SOGT in Kimanis to Sipitang.
The total lease value exceeds RM200 million over a 30-year period.
Masiung said the agreements marked another significant milestone in the longstanding collaboration between Sedco and Petronas, which began in 1997.
Over nearly three decades, the partnership has supported the development of major energy infrastructure in Sabah, including the Gayang-Sepanggar Gas Pipeline, Sipitang Lateral Gas Pipeline and Dalak Gas Pipeline.
He said the latest agreements demonstrated Sedco’s role as an enabling agency supporting the development of strategic oil and gas infrastructure in the State.
The agreements would also provide greater certainty for the continued operation of SOGT and SSGP, while giving Petronas a more stable foundation for long-term planning in Sabah’s energy sector and related activities.
More importantly, he said, the arrangement demonstrated how the State’s strategic land assets could be utilised effectively to generate sustainable economic returns while supporting critical energy infrastructure and wider development potential, particularly along the Kimanis-Sipitang economic corridor.
Masiung said the lease arrangements would strengthen Sedco’s recurring revenue and contribute to a more stable long-term financial position.
“This positive financial position will strengthen Sedco’s ability to carry out its core development mandate of generating commercial returns, which can subsequently be reinvested to support more sustainable economic development in Sabah,” he said.
The improved financial position would also reinforce Sedco’s commitment to implementing strategic development initiatives, including the Kudat Blue Economy Industrial Park (KBEIP), while enabling it to explore viable investment and partnership opportunities.
Such initiatives could create new industries, generate employment and contribute greater economic value to Sabah.
Masiung said Sedco was also committed to extending the benefits of its commercial performance to local entrepreneurs through capacity-building and business development initiatives.
Sedco had recently introduced the RISE entrepreneur capacity-building programme and established the S-Seed development fund to support the growth and expansion of local businesses.
Under the initiative, Sedco allocates 10 per cent of its net profit to S-Seed to support Bumiputera entrepreneurs through matching grants, accessible financing and strategic investments.
He said the initiatives were aimed at helping Sabah entrepreneurs build stronger and more sustainable businesses, expand their operations, create employment opportunities and contribute meaningfully to the State’s economic progress.
Moving forward, Masiung said Sedco intended to maintain its growth momentum by strengthening existing revenue streams, optimising asset value, exploring viable investment opportunities and expanding strategic partnerships to unlock new avenues for growth.
He said the signing of the land lease agreements followed negotiations based on mutual understanding, compromise, mutual respect, careful consideration and a shared commitment to reaching a fair and reasonable agreement for both parties.
He expressed appreciation to Petronas for its cooperation, professionalism and understanding throughout the negotiations, which had enabled the agreements to be finalised.
Masiung also thanked the Sabah Lands and Surveys Department and the State Lands and Mines Office for their commitment and cooperation in facilitating the land acquisition process.
He also acknowledged the support of the Industrial Development, Entrepreneurship and Transport Ministry (Mindet), together with the Lands and Surveys Department, in facilitating the finalisation of the land lease rates.
He said the achievement reflected the strong spirit of cooperation and mature working relationships among all parties involved.
Masiung expressed hope that the agreements would further strengthen the strategic partnership between Sedco, the Sabah Government and Petronas, while ensuring that the resulting industrial development and economic growth delivered lasting benefits to the people and prosperity to the State.
