KUALA LUMPUR: Sabah Government, through SMJ Energy (SMJE) will be acquiring 25 per cent equity in the USD3.1 billion nearshore floating liquefied natural gas (ZLNG) facility in Sipitang following the signing of the Head of Agreement (HOA) with PETRONAS at the Malaysia Petroleum Club (MPC), here today.
“This partnership marks another significant milestone to ensure Sabah’s long-term development goals, promoting industrial growth and energy security and creating new opportunities to drive Sabah’s progress.
“Through strategic investments like ZLNG, we will strengthen the state’s economic resilience while ensuring that the benefits of Sabah’s natural resources directly contribute to the well-being of our people,” said the Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor after witnessing the HOA signing.
The ZLNG facility with a capacity of 2 million tonnes per annum (MTPA) represents a significant addition to Malaysia’s LNG landscape.Positioned nearshore in Sipitang, ZLNG is currently under construction and is expected to commence operations in the second half of 2027.
This project complements Sabah’s growing LNG footprint, in addition to two other floating LNG facilities, PFLNG1 (1.2 MTPA) and PFLNG2 (1.5 MTPA), currentlyoperating in Sabah waters.
The State Government also announced its intention to acquire a 40 per cent participating interest in PFLNG1 through SMJ Energy, with due diligence targeted to begin in the second half of 2025.
SMJ Energy’s growth trajectory since the signing of the Commercial Collaboration Agreement (CCA) with PETRONAS in December 2021 has been rapid.
The company now holds 50 per cent equity in the Samarang PSC oil production asset, 10 per cent equity in LNG9, 25 per cent equity in the SAMUR petrochemical complex and full ownership of Sabah International Petroleum (SIP), which operates both FPSO and FSO assets.
SMJ Energy also holds free carry and back-in rights in exploration blocks SB409 (20%), SB403 (20%), SB306A (15%) & SB306B (15%).
“We are a prudent financial investor with a disciplined approach to portfolio building. Our entry into ZLNG is part of our strategic plan to further diversify and strengthen our position in the upstream, LNG, and petrochemical sectors.
“This opportunity aligns with our mandate to generate long-term, stable cash flows from high-quality, cash-generating assets,” said SMJ Energy Chief Executive Officer Datuk Dr Dionysia Kibat.Sabah’s downstream ambitions are also advancing rapidly.
Sabah Energy Corporation (SEC), the state’s gas aggregator and distributor, plays a crucial role in ensuring a stable domestic gas supply for Sabah’s industries.
One of its landmark projects includes supplying gas to E-Steel’s RM31 billion green steel plant at the Sipitang Oil and Gas Industrial Park (SOGIP), a key investment supporting Sabah’s move toward industrial diversification.-pr/BNN
