KOTA KINABALU: Sabah Energy Corporation Sdn Bhd (SEC) has signed a major deal with PETRONAS to supply natural gas worth around RM1bil annually to Esteel Enterprise Sabah Sdn Bhd, boosting the state’s industrial and energy sectors.
Under the agreement, SEC – a wholly-owned Sabah government-linked company – will supply 150 million standard cubic feet per day (MMscfd) of natural gas to Esteel, with 100MMscfd allocated for manufacturing and 50MMscfd for power generation.
Sabah Chief Minister Datuk Seri Hajiji Noor described the agreement as a significant milestone in the state’s long-term development, promoting industrial growth and energy security.
“We look forward to further collaboration with PETRONAS in the best interest of Sabah,” he said after witnessing the exchange of agreements between SEC and PETRONAS as well as SEC and Esteel here yesterday.
Hajiji added that Sabah is ready to cater to the growing industrial needs and investments, and has put in place plans to improve infrastructure and facilities to complement these initiatives.
Under the agreement between SEC and PETRONAS, the national petroleum company will supply an additional 104MMscfd of natural gas to SEC, increasing its total supply to 370MMscfd to meet Sabah’s energy needs.
Representing PETRONAS at the signing was Anuar Ismail, senior general manager of Malaysia Petroleum Management’s (MPM) integrated hydrocarbon management, while SEC chief executive officer Datuk Adzmir Abdul Rahman signed on behalf of SEC.
Commenting on the agreement, MPM senior vice-president Datuk Bacho Pilong said it underscored PETRONAS’ unwavering commitment to providing reliable energy solutions that contribute to Sabah’s growth while supporting more sustainable energy use.
The first phase of Esteel’s green steel plant is expected to be operational by the fourth quarter of 2027, with an investment of US$1.93bil (RM8.92bil) and on a 180ha site.
This phase will create 2,795 direct job opportunities and produce 2.5 million tonnes of cleaner hot briquetted iron.
The three-phase project brings in an estimated US$4.39bil (RM19.6bil) investment.
The plant opted for natural gas as a reducing agent instead of coke and coal, reducing carbon emissions by 70% and making it efficient and environmentally friendly.
Earlier, Hajiji said this marks Sabah’s confidence in the green steel project, calling it a key investment in the state’s growth and development strategy.
