KUCHING: Petroleum Sarawak Bhd (Petros) is penetrating the supply of the natural gas business in Sarawak and the export market in neighbouring West Kalimantan, Indonesia.
The state-owned oil and gas (O&G) company will commence supplying liquified petroleum gas (LPG) in red-colour cylinders in the Kuching and Samarahan divisions from Jan 1,2021, according to chairman Tan Sri Hamid Bugo.
Bulk supply for the industrial sector will also be available in first-quarter 2021.
He said the supply will gradually be extended to cover all residential homes, businesses and commercial firms statewide.
Petros LPG cylinders are currently manufactured by KKB Engineering Bhd
. The gas-filled 14kg LPG tank will be marketed at a government-subsidised price of RM26.60.
Sarawak’s existing LPG suppliers are Petroliam Nasional Bhd (Petronas) (green cylinder) and Mygaz (yellow cylinder). Mygaz Sdn Bhd is a subsidiary of Thailand’s public-listed Siamgas and Petrochemicals Public Company Ltd operates the LPG business in Malaysia as a result of the business acquisition from the Shell LPG brand.
Chief minister Datuk Patinggi Abang Johari Tun Openg, who launched the Petros LPG cylinder here on Dec 2, said Petros would export its cooking gas to West Kalimantan next year following a written request from the Indonesian province governor.
Johari said Sarawak had agreed in principle to the West Kalimantan governor’s request that also includes the supply of essential food items like sugar and rice. The state authorities have held consultations with the Indonesian consul general here and a formal meeting with the governor is expected soon.
Indonesian households on the Sarawak-Kalimantan border have been using Petronas LPG cylinders.
“Petros aims to provide at least one gas cylinder to each Sarawakian household within four to five years, ” said Hamid
In Jan 1,2020, Petros, through wholly owned operating subsidiary Petroleum Sarawak Gas Sdn Bhd, undertook ownership and operatorship of the following natural gas assets – the Miri gas distribution system and Bintulu gas distribution system for industrial customers acquired from Petronas Gas Bhd, and Sarawak Gas Distribution Sdn Bhd, which owns, operates and supplies natural gas on its piped natural gas grid to households and commercial businesses in Miri, consolidated from Sarawak State Financial Secretary.
Hamid said currently, the piped gas grid supplies natural gas to more than 25,000 households in oil city Miri and 1,500 commercial businesses and industries in Miri and the industrial town Bintulu in the northern region.
According to Johari, Petros is planning to extend the piped gas system to other towns in Sarawak to increase its coverage network.
As of Jan 1,2020, the state’s domestic natural gas supply was consolidated with Petros as the single entity for the supply, sale and distribution of natural gas to domestic customers in Sarawak.
According to Petros, its focus is on security, as currently, 60% of the LPG used by Sarawakians is imported. “Petros will focus our efforts towards rebalancing and aggregating the supply of this important fuel source for the state from domestic LPG production from our O&G assets in Sarawak and strategic investments in infrastructure.
“We will continue to collaborate with existing players in the LPG value chain, distribution and sales of our products in an area we hope, in collaboration with our supply chain partners, to improve fair prices to end-customers, ” it added.
In another development, the Sarawak government and Petronas are scheduled to sign a commercial settlement agreement related to the imposition of the state sales tax on petroleum products in Kuala Lumpur tomorrow.
The Sarawak government and Petronas have reached an agreement following several rounds of negotiations on the “disputed” sales tax.
The Sarawak state consultative committee has been briefed on the details of the settlement agreement and the significant benefits and advantages Sarawak would get out of it, according to its chairman Datuk Amar Mohd Asfia Awang Nassar, also Sarawak state assembly Speaker.
Details of the settlement will be revealed upon the agreement signing. Recall, the Sarawak government and Petronas consented in May 2020 that the issues related to the imposition of the 5% state sales tax on petroleum products from 2019 be resolved outside the legal process.
Following the agreement, the national oil company withdrew a legal suit against the Sarawak government on the issue in August.
In September, Petronas paid up the arrears for the 2019 sales tax amounting to RM2.95bil. The sales tax for the first six months of 2020 has also been paid, said Johari.
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