Kota Kinabalu: Sabah’s largest domestic supplier and transporter of natural gas, Sabah Energy Corporation Sdn Bhd (SEC), has inked multiple Natural Gas Sales Agreements (GSAs) and a Heads of Agreement (HOA) with major investors in the State.
Chief Minister Datuk Seri Hajiji Noor said with these, SEC is now playing an integral role in supporting the growth of industries and economic development in Sabah.
He was glad to note the State playing a lead role in the gas industry through its wholly-owned company. SEC is now bearing fruit following the signing of the agreement with Petronas in October last year, giving SEC selected downstream gas pipeline assets and supply of natural gas contracts.
SEC is expected to take over the natural gas pipelines from Petronas from April 1, this year.
“This augurs well for the State’s economic growth, in line with the State Government’s aspiration under its Sabah Maju Jaya initiative,” said Hajiji after witnessing the GSAs and HOA signing ceremony, here, Monday. The Sabah Energy Corporation Sdn Bhd signed gas agreements with several major investors in Sabah on Monday, said Chief Minister Datuk Seri Hajiji Noor, who witnessed the signing events.
The first GSA was a long-term Gas Sales Agreement (GSA) between SEC with SBH-Kibing Solar New Materials (M) Sdn Bhd for the latter’s silica sand processing and solar panel manufacturing project.
SBH Kibing is investing RM2 billion in Sabah, which is expected to bring huge benefits to the state in terms of an increase in foreign direct investment, amounting to 1,800 employment opportunities for Sabahans, and other tangible economic spin-offs.
SEC signed the GSA with SK Nexilis Malaysia Sdn Bhd, a leading manufacturer of copper foil for batteries and flexible Copper Clad Laminate for the display parts industry.
The company’s investment of RM4.2 billion in building its first overseas copper foil manufacturing facility at the Kota Kinabalu Industrial Park (KKIP) is part of Sabah’s efforts to promote non-power sector industries in the State and position it as a hub for electric vehicle (EV) components.
The manufacturing facility at KKIP is expected to create some 500 jobs.
SEC also signed a Gas Sales Heads of Agreement with Petronas Gas Berhad’s subsidiary, RGTLD, for the natural gas supply.
Through this long-term gas supply agreement, SEC will undertake the role of a gas supplier to the recently announced RM230 million plant project at Sipitang Oil and Gas Industrial Park (Sogip) in Sipitang.
The plant, targeted to be completed in the first quarter of 2026, will play an integral role as the sole energy supplier to the State’s first near-shore 2.0 million tonnes per annum (MTPA) floating liquefied natural gas facility.
This plant also serves as a potential heat source for future consumers in Sogip.
On Jan 17, 2023, SEC also concluded the Natural Gas Sales Novation Agreement with Petronas, Petronas Carigali Sdn Bhd and existing Independent Power Producers (IPPs) with a total capacity of 880MW.
The Novation Agreement marked the significance of the State-owned company as the major natural gas supplier for the power sector.
Representatives from the IPPs, namely Kimanis Power Plant Sdn Bhd, SPR Energy (M) Sdn Bhd, Ranhill Powertron Sdn Bhd, Ranhill Powertron II Sdn Bhd and Sepangar Bay Power Corporation Sdn Bhd, were present to receive the signed documents from SEC.
Also present were State Secretary Datuk Seri Sr Safar Untong, State Attorney-General Datuk Nor Asiah Mohd Yusof, SEC Chairman Datuk Anwar Ayub and SEC Chief Executive Officer Adzmir Abdul Rahman.
When met by reporters later, Adzmir explained that SEC would only take over the branching out from the Sabah-Sarawak Gas Pipeline (SSGP) beginning April 1 this year, not the SSGP itself.
He said the SEC’s focus is basically the strategy of mergers and acquisitions (M&A). “This is all commercial deals, where we want to make sure that whatever assets we are taking over would give us returns, which is our priority,” he said.
He said for a start, SEC will take over the branching out of the SSGP from Sabah Oil and Gas Terminal (SOGT) in Kimanis to the two independent power providers (IPPs) in the same area, which would be its two customers, as well as the other one which is the branching out from SSGP to the Sabah Ammonia Urea (Samur) Plant in Sipitang.
“Not the big pipeline (SSGP). For the big pipeline, we will monitor first. When there are customers and we know the prices are right, then we may look at the possibility of taking over in future.
“But this will be studied. We want to make sure everything that we take over gives us returns,” he said, adding SEC will not take over all the branching out of SSGP in Sabah but only the selected ones.
* Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss.
* Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
