Kota Kinabalu: Sabah Economic Development Corporation (SEDCO) is making major strides in strengthening its contribution to Sabah’s economy, with the formalisation of long-awaited Land Lease Agreements with Petroliam Nasional Berhad (PETRONAS) expected to unlock approximately RM100 million in income over the next two years.
Long-awaited agreements expected to generate approximately RM100 million over the next two years, as SEDCO targets nearly RM20 million in returns and direct contributions to the State in 2026.
The agreements represent an important breakthrough for SEDCO and the State, transforming strategic land assets supporting major energy infrastructure into meaningful and sustainable economic returns for Sabah.
Building on its improved financial performance, SEDCO has also exceeded its original contribution targets and is planning to return nearly RM20 million to the State in 2026 through dividends, loan repayments and direct contributions, subject to the necessary approvals.
This represents a significant increase from the RM10 million contributed to the State in 2025, and only RM6M in 2024 marking a steep improvement and a new historical era of growth for the SEDCO Group for years to come.
Under the leadership of Chief Minister YAB Datuk Sri Hajiji, guidance of MINDET Minister YB Datuk Ewon Benedick, SEDCO's Chairman YB Datuk Masiung Banah, MINDET SUT Datuk Thomas Logijin, and SEDCO's Group General Manager Datuk Ar. James Wong Kein Peng - SEDCO commits to deliver higher and continued returns back to the State in coming years, with a historical target to hopefully deliver RM30M back to the State in 2027.
The latest milestone reflects SEDCO’s ongoing transformation into a stronger and more commercially driven State development corporation — one that not only manages strategic assets, but actively unlocks their value to generate new revenue, strengthen the State’s financial position and create wider economic opportunities for Sabah.
A MAJOR MILESTONE WITH PETRONAS SEDCO and PETRONAS today formalised Land Lease Agreements covering the Sabah Oil & Gas Terminal (SOGT) in Kimanis and the Sabah-Sarawak Gas Pipeline (SSGP), marking a significant milestone in a longstanding relationship spanning nearly three decades.
The agreements cover 32.5 hectares for the operation of SOGT in Kimanis and approximately 260 hectares along a 91-kilometre pipeline alignment for the SSGP, which facilitates the transmission of gas from SOGT Kimanis to Sipitang.
The formalisation provides greater clarity and certainty for the continued operation of these strategically important facilities, establishing a stable foundation for PETRONAS’ long-term planning and continued development of oil and gas infrastructure and related activities in Sabah.
Importantly for Sabah, the agreements demonstrate how strategic State land assets can be more effectively leveraged to generate sustainable economic returns while continuing to support critical energy infrastructure and the broader development potential of the Kimanis-Sipitang economic corridor.
With a total lease value exceeding RM200 million over a 30-year period, the agreements will further strengthen SEDCO’s recurring income base and long-term financial position.
TURNING STRONGER PERFORMANCE INTO GREATER RETURNS FOR SABAH SEDCO’s growing revenue base is strengthening the Corporation’s capacity to deliver on its fundamental development mandate — generating commercial returns that can ultimately be reinvested into Sabah’s economy.
Rather than viewing stronger financial performance as an end in itself, SEDCO intends to translate this momentum into greater returns to the State, new investments, strategic infrastructure and opportunities for Sabah businesses and entrepreneurs.
The Corporation continues to pursue strategic development initiatives such as the Kudat Blue Economy Industrial Park (KBEIP), while exploring commercially viable investments and partnerships capable of creating new industries, employment and investment opportunities.
This evolving approach strengthens SEDCO’s role beyond that of an asset owner. The Corporation is positioning itself as an active catalyst for investment, economic diversification and long-term value creation for Sabah.
ENSURING GROWTH REACHES SABAH ENTREPRENEURS SEDCO is also working to ensure that the benefits of its stronger commercial performance extend beyond the Corporation itself and reach Sabah’s entrepreneurial community.
Through initiatives such as RISE and S-SEED, SEDCO supports the development and expansion of local businesses.
The Corporation is committing 10% of its net profit to S-SEED to support Bumiputera entrepreneurs through matching grants, soft financing and strategic investments.
The objective is to help Sabah entrepreneurs build stronger and more sustainable businesses, expand their operations, create employment and contribute meaningfully to the State’s economic progress.
A PARTNERSHIP BUILT OVER NEARLY THREE DECADES SEDCO’s collaboration with PETRONAS in land-related development dates back to 1997.
Over nearly three decades, the partnership has supported key energy infrastructure projects including the Gayang-Sepangar Gas Pipeline, Sipitang Lateral Gas Pipeline and Dalak Pipeline projects, reflecting an enduring strategic relationship that has contributed to Sabah’s energy and industrial development.
The latest Land Lease Agreements therefore represent more than the conclusion of a long-standing land arrangement. They mark another step forward in transforming strategic collaboration and State assets into measurable and sustainable economic value for Sabah.
BUILDING A STRONGER SEDCO FOR SABAH Looking ahead, SEDCO intends to build on this momentum by strengthening existing revenue streams, unlocking greater value from its assets, pursuing commercially viable investments and establishing strategic partnerships capable of opening new areas of economic growth.
The Corporation’s direction is clear: stronger commercial performance must ultimately translate into stronger returns and greater opportunities for Sabah.
Through disciplined commercialisation, strategic investment and stronger partnerships with industry, SEDCO is positioning itself as a more commercially driven, resilient and impactful State development corporation — capable of generating value today, reinvesting for tomorrow and contributing more significantly to Sabah’s long-term economic future.
