KUCHING: Petroliam Nasional Bhd (Petronas) will raise the supply of natural gas to Sarawak by more than 250%, or up to 1,200 mmscf (million standard cubic feet) per day from the current 450 mmscf per day to support the implementation of projects under the Sarawak Gas Roadmap (SGR).
Chairman Tan Sri Mohd Bakke Salleh said the staggered increase in the natural gas supply would not only support Sarawak’s aspiration to attract investments from new, higher value-adding industries into the state but also provide the necessary impetus for further downstream exploration that would strengthen the state’s hydrocarbon resource base.
“Petronas currently has existing agreements to supply natural gas to the power and non-power sectors in Sarawak and is actively encouraging sustained upstream investments in exploring more gas resources and further developing discovered gas resources, particularly in Sarawak,” he added at the signing of a memorandum of understanding between Petronas and state-owned Petroleum Sarawak Bhd (Petros) over the weekend.
The signatories were Petronas executive vice-president and chief executive officer (upstream) Adif Zulkifli and Petros group CEO Datuk Sauu Kakok. Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg officiated the event.
Johari described the increase in the supply of natural gas to Sarawak by the national oil company as a step change achievement for the implementation of identified projects under the 10-year SGR.
“The SGR is designed to realise the full potential of abundant gas resources aimed at achieving Sarawak Vision 2030, contributing towards a 10% growth in gross domestic product and creating thousands of ‘high income’ job opportunities.
“The SGR envisages implementation of broad economic activities in the period from the development of additional power generation, petrochemical industries to re-shaping the landscape of downstream businesses within Sarawak, centred upon four strategic demand hubs panning Sarawak,” he said.
Johari said Petros is the one-stop centre for operationalising the oil and gas value chain of Sarawak in collaboration with players in the marketplace, including investors and Petronas alike.
He said since its incorporation in 2017, the state government has continued to strengthen Petros.
In the upstream, Petros’ achievements to date include as resource and implementator of the state’s Oil Mining Ordinance 1958. Petros has awarded its first onshore exploration block SK 433 to rejuvenate the exploration, development and mining of oil and gas in onshore areas.
“Its wholly-owned operating subsidiary Petroleum Sarawak Exploration & Production Sdn Bhd (Petros EP) has also entered into two onshore Sarawak production sharing contracts as a non-operating equity partner from Jan 1, 2021.
“As a result, today, Petros EP is the third largest equity gas producer in (working interest share) in Sarawak, behind Petronas Carigali and Shell and the second largest equity condensate producer.
“Petros EP has also secured a minority carried interest position in one offshore Sarawak exploration block and expects to gradually increase its presence going forward,” he added.
In the downstream, the Chief Minister said Petros is driving the increase of domestic gas utilisation – closely with other state entities – through various SGR initiatives to capture greater value locally from upstream gas production.
Petros has since Jan 1, 2020 become the single entity for the supply, sale and distribution of domestic gas to industrial and residential customers, with ownership and operationship in Bintulu and Miri gas distribution systems.
In August this year, Petros liquid petroleum gas entered the homes and businesses of Sarawak, first serving the capital city of Kuching, Padawan and Bau, and this will be expanded across the state soon.
“Through assuming regulatory control of onshore mining, enforcing our constitutional authority over the distribution of gas and increasing Petros’ participation in offshore petroleum production areas, the state government will continue to strengthen Petros in spearheading the state’s enhanced involvement in the oil and gas industry.“A key enabler is access by the state for adequate natural gas supplies needed to drive the state’s industrial development agenda.”
Johari said through the “Commercial Settlement Agreement” reached between Sarawak government and Petronas a year ago, the state government is emphasising the case for greater participation of Sarawak contractors in the Malaysian oil and gas industry, with a focus on oil and gas activities in Sarawak.
He said through the consultation framework, Sarawak is working with Petronas to help Sarawak contractors to capture a bigger share of higher value contracts, verify and prioritise bonafide Sarawakians and Sarawak-based companies and accelerate vendor development programme for Sarawakians companies.
Source: The Star
