Sabah Energy inks multiple natural gas sales deals with key investors

KOTA KINABALU: State-owned Sabah Energy Corporation (SEC) is set to take over natural gas supplies to industries as it gears up to raise Sabah's profile in the oil and gas sector.

SEC, which will become Sabah's largest domestic supplier and transporter of natural gas, signed multiple gas sales agreements (GSAs) and heads of agreement (HOA) with major investors in the state on Monday (March 6).

Chief Minister Datuk Hajiji Noor (pic) said with these signings, SEC now played an integral role in the growth of industries and economic development in Sabah.

Hajiji said the signing of the agreements was in line with the state government's own deal with PETRONAS in October that gave SEC selected downstream gas pipeline assets and natural gas supply contracts.

SEC is expected to take over the natural gas pipeline from PETRONAS from April 1, he said after witnessing the signing.

“This augurs well for the state's economic growth in line with the state government's aspirations under its Sabah Maju Jaya initiative,” he added.

The first GSA was a long-term deal between SEC and SBH-Kibing Solar New Materials (M) Sdn Bhd for a silica sand processing and solar panel manufacturing project.

SBH Kibing is investing RM2bil in Sabah, expected to bring such benefits as an increase in foreign direct investment and the creation of 1,800 employment opportunities for Sabahans, among other spin-offs.

SEC also signed a 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 RM4.2bil in building its first overseas copper foil manufacturing facility at the Kota Kinabalu Industrial Park (KKIP) is part of Sabah's efforts to attract non-power sector industries and position the state as a hub for electric vehicle (EV) components.

The manufacturing facility at KKIP is expected to create some 500 job opportunities. SEC also signed a HOA with PETRONAS Gas Berhad's subsidiary RGTLD for the supply of natural gas.

Under the agreement, SEC will undertake the role of gas supplier to the recently-announced RM230mil plant project at the Sipitang Oil and Gas Industrial Park (Sogip).

The plant, targeted to be completed in the first quarter of 2026, will play a key 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 energy source for future consumers in Sogip.

On Jan 17, SEC also concluded a natural gas sales novation agreement with PETRONAS Carigali Sdn Bhd, and existing independent power producers (IPPs) with a total capacity of 880MW.

Other agreements signed for gas supply were with IPPs 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.

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