KUCHING: The Sarawak government is giving Petronas three months to finalise arrangements with state-owned oil and gas company, Petros on the distribution of gas in Sarawak.
Premier Tan Sri Abang Johari Openg said Sarawak previously decided that Petros would take over the buying and selling of gas in the state from July 1.
However, he said Petronas requested a postponement citing concerns that gas distribution to LNG Plants in Bintulu would be affected.
"We are giving them three months to sort out this issue until October 1 this year," Abang Johari told reporters after attending the raising of the state flag, Ibu Pertiwi, here today.
The premier was asked to respond to a statement by Petronas published in the Business Times.
He said under the Distribution of Gas Ordinance, Petros, being the gas aggregator, has been empowered to manage gas distribution in Sarawak.
He said discussions are ongoing between Petros and Petronas on the relevant arrangements.
"We said we respect their concern because we have equity in LNG plants," he said.
"The discussions must be finalised by October 1, otherwise, we will go ahead with the arrangement," he said, adding that other matters relating to the gas distribution have all been resolved.
"We have also resolved all these issues with other oil and gas companies, such as Shell," Abang Johari said.
He added that discussions on oil and gas exploration between Petros and other oil and gas companies are ongoing.
It was previously reported that Petronas is in discussions with Sarawak, Putrajaya and Petros to resolve issues related to gas distribution in Sarawak.
Petronas emphasised the importance of all parties understanding and acknowledging each other's constraints to achieve a satisfactory outcome.
RHB Research recently said it expected potential operational disruptions in the near term until there was more clarity or a clear resolution between Petros and Petronas.
This comes after news that Petros would take over the trading activities of natural gas produced in the state from Petronas, with the transition starting in the second half of this year.