Petronas to open Sabah's first nearshore LNG facility at Sogip, expected start-up to be end of 2026

Chief Minister Datuk Seri Hajiji Noor (third right) receiving a souvenir from International Trade and Industry Ministry secretary-general Datuk Lokman Hakim Ali (third left) after the courtesy call on Tuesday. - Pic courtesy of Chief Minister's office

KOTA KINABALU: Sabah will have its first nearshore liquefied natural gas (LNG) facility at the Sipitang Oil & Gas Industrial Park (Sogip), where it will contribute to an additional 2 million tonnes per annum (MTPA) of LNG production capacity in this state once completed.

The new LNG plant will be built by national oil and gas company Petronas, said Chief Minister Datuk Seri Hajiji Noor when announcing this on Tuesday (Oct 26).

The Front End Engineering Design (FEED) activity for the project would start around this month-end and subject to Final Investment Decision (FID) in 2022, the facility was planned to be ready for start-up by the end of 2026, he added.

"The nearshore LNG project is an outcome of a joint study between the state government and Petronas to identify optimal gas monetisation options, in order to maximise long-term economic spin-offs that will benefit the people of Sabah.

"It is expected to increase the total LNG production from the current 2.7 MTPA to 4.7 MTPA.

"It is a step in the right direction as the government continues to pursue more deals to get additional revenue via equity participation for Sabah," he said in a statement issued following a courtesy call by International Trade and Industry Ministry secretary-general Datuk Lokman Hakim Ali.

At present, Petronas has two floating LNG (FLNG) facilities that make up the 2.7 MTPA production.

The Chief Minister assured that the Gabungan Rakyat Sabah (GRS) state government would continue to look at more options to ensure the people of Sabah reap the benefits from the state's oil and gas sector.

Meanwhile on the nearshore LNG facility, once operational, it was also expected to contribute to strengthening the local ecosystem of talent and companies with niche skills to carry out operations and support services.

The plant to be moored at Petronas Chemicals Fertiliser Sabah's new jetty extension while being supported by selected utilities and facilities from onshore, would see feed gas supplied from Sabah’s gas fields via the existing Sabah Sarawak Gas Pipeline (SSGP).

With its relocatable capabilities, the nearshore LNG plant was expected to provide continuous asset utilisation while optimising investment.