KOTA KINABALU: Sabah will not suffer losses following PETRONAS' decision to decommission the RM4.6bil Sabah-Sarawak Gas Pipeline (SSGP), Finance Minister Datuk Seri Masidi Manjun assured.
He emphasized that the move could bring long-term benefits, allowing Sabah to retain more of its gas resources.
The SSGP, operational since 2014, faced costly leaks and repairs, prompting PETRONAS to reassess its priorities.
"From the beginning, the pipeline faced challenges, including expensive repairs for leakages. It doesn't make financial sense to spend hundreds of millions on repairs repeatedly," Masidi explained.
Rather than maintaining a problematic pipeline, PETRONAS is exploring alternative methods to utilize Sabah’s gas efficiently.
The 512km pipeline was intended to transport gas from Sabah’s offshore fields to Sarawak’s PETRONAS LNG Complex in Bintulu.
Persistent issues, including a fatal fire in 2014, multiple leaks, and a rupture in 2020, raised concerns about its viability.
In September 2022, PETRONAS declared its inability to fulfil gas supply commitments from the SSGP due to soil movement-induced leaks.
Masidi noted PETRONAS is now focusing on developing the ZLNG offshore facilities in Sipitang, allowing Sabah to retain more gas for domestic use.
"We believe the gas should stay in Sabah because it originates here. This aligns with PETRONAS' reassessment of priorities," Masidi said during the Sabah Government State-Level Chinese New Year Open House at the Sabah International Convention Centre on Thursday (Jan 30).
Attendees included Sabah Tuan Yang DiPertua Negeri Tun Musa Aman, Chief Minister Datuk Seri Musa Aman, their spouses, cabinet ministers, and community leaders, drawing a crowd of about 25,000.
Masidi assured that Sabah’s gas export revenue remains unaffected despite the pipeline’s decommissioning.
"Sabah stands to benefit more by keeping the gas here, avoiding a problematic and costly pipeline," he added.
PETRONAS disclosed its plan to decommission the SSGP in its 2025-2027 Outlook report, including plugging and abandoning 153 wells, decommissioning 37 offshore facilities, and shutting down the onshore SSGP by 2027.
Despite the shift, Masidi reaffirmed Sabah's role in Malaysia’s energy sector.
"Bintulu remains a major LNG processing hub. With the current situation, PETRONAS is exploring other options to utilize the gas," he said.
