Petronas to decommission Sabah-Sarawak Gas Pipeline a practical move, says Sabah minister

KOTA KINABALU: Petroliam Nasional Bhd (Petronas) is taking a practical approach in its decision to shut down the Sabah-Sarawak Gas Pipeline (SSGP), said Sabah Finance Minister Datuk Seri Masidi Manjun.

Masidi said Petronas is reassessing its priorities due to the ongoing challenges faced by the gas pipeline connecting Kimanis and Bintulu.

"My understanding is that there are two key reasons. First, from the very beginning, the pipeline has experienced leakages, leading to costly repairs.

"Financially, it makes sense because repairing a 500-kilometre gas pipeline every time an issue arises is extremely expensive.

"It is not viable for Petronas to continue spending hundreds of millions on repairs whenever there's a problem," he told reporters after attending the Sabah state-level Chinese New Year celebration at the Sabah International Convention Centre.

Petronas recently announced in its 2025-2027 Activity Outlook that it would decommission the 500-kilometre RM4.6 billion SSGP, which began operations in 2014.

Masidi, who is also chairman of state-owned SMJ Energy Sdn Bhd (SMJE), added that Petronas plans to build the largest near-shore liquefied natural gas (LNG) facility in Sabah at the Sipitang Oil and Gas Industrial Park.

"The Bintulu LNG facility is one of the largest in the world.

"That is why, from the beginning, all gas, including Sabah's, was channeled there. But we are not losing out.

"In fact, we stand to benefit more by keeping the gas in Sabah. Since it originates from Sabah, it should remain here to support local industries and development," he said.

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