KOTA KINABALU: Petroliam Nasional Bhd (Petronas) will build Sabah's first and largest near-shore liquefied natural gas (LNG) facility at the Sipitang Oil & Gas Industrial Park (SOGIP).
International Trade and Industry Ministry secretary-general Datuk Lokman Hakim Ali announced it during a courtesy call on Sabah Chief Minister Datuk Seri Hajiji Noor.
Hajiji, who is also the state finance minister, said the project would be subject to the final investment decision in 2022.
He said the construction of the LNG facility is a step in the right direction as the government continues to pursue more deals to get additional revenue via equity participation for Sabah.
"The near-shore LNG project is an outcome of a joint study between the state government and Petronas to identify optimal gas monetisation options to maximise long-term economic spin-offs that will benefit the people of Sabah," he said.
The Chief Minister assured that the GRS state government would be looking at many more options to ensure the people of Sabah reap the benefits from the state's oil and gas sector.
The new LNG plant is expected to increase the total LNG production from 2.7 to 4.7 million tonnes per annum (MTPA), adding another 2 million MTPA of LNG production capacity.
Once operational, the LNG plant will further strengthen the local ecosystem of talent and companies with niche skills to carry out operations and support services.
The near-shore LNG plant would be developed at SOGIP where feed gas will be supplied from Sabah's gas fields via the existing Sabah Sarawak Gas Pipeline (SSGP).
The plant will be moored at the Petronas Chemicals Fertiliser Sabah's new jetty extension and supported by selected utilities and facilities from onshore.
With its relocatable capabilities, the nearshore LNG plant provides continuous asset utilisation and optimises investment.
The Front End Engineering Design (FEED) activity for the project will start in late October 2021 and subject to FID, the nearshore LNG plant is planned to be Ready for Start-Up by the end of 2026.