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Petronas recognises Petros as Sarawak’s gas aggregator, excluding LNG: Azalina | Scoop
Law Minister Datuk Seri Azalina Othman Said confirms Petronas' recognition of Petroleum Sarawak Bhd (Petros) as Sarawak’s gas aggregator in a written parliamentary reply. - Scoop graphic, February 5, 2025.
News

Petronas recognises Petros as Sarawak’s gas aggregator, excluding LNG: Azalina

The Law minister confirmed this in a written parliamentary reply

Scoop Reporters
Updated
5:11 PM MYT

 

KUALA LUMPUR – Petronas has acknowledged Petroleum Sarawak Bhd (Petros) as Sarawak’s gas aggregator, excluding liquefied natural gas (LNG), following discussions between the federal and state governments.

Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said confirmed this in a written parliamentary reply to Chong Chieng Jen (PH–Stampin), outlining the agreements reached between Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg on January 7.

“Petronas accepts the role of Petros as a gas aggregator (not LNG) in Sarawak and is willing to cooperate with Petros in the state,” Azalina said.

She added that Petronas and its subsidiaries are not required to obtain additional licences or comply with further procedures beyond those stipulated under the Petroleum Development Act 1974 (Act 144) when conducting petroleum operations in Sarawak.

Other key agreements include Sarawak’s recognition of Act 144 as the governing law for Malaysia’s petroleum industry.

All existing agreements between Petronas and third parties, including Petros, related to petroleum activities in Sarawak remain valid and must continue without changes. Petronas and Petros have also committed to full cooperation on all related matters.

The federal government, Petronas, the Sarawak government, and Petros are currently refining certain aspects of the agreement, including its legal implications.

Sarawak, one of Malaysia’s main gas-producing states, supplies natural gas to countries such as South Korea, Japan, and China. Under amendments to the state’s Distribution of Gas Ordinance (DGO) 2016, Petros became the sole gas aggregator for Sarawak from Feb 1, 2024.

However, Petronas remains responsible for LNG exports, as clarified by Prime Minister Anwar Ibrahim in January. “While the DGO is acknowledged, it should co-exist with the Federal Constitution or other federal laws, and Petronas’ position remains unaffected.”

Previously, it was reported that Petronas and Petros are engaged in a legal dispute. Petros has taken Petronas to court over the latter’s call on a RM7.05 million bank guarantee, alleging that the Sarawak Gas Sales Agreement (SGSA) with Petronas is illegal. The case is scheduled to be heard in the Kuching High Court on February 19.

This legal contention raises questions about the effectiveness of the discussions between the federal and state governments, as well as the true state of relations between Petronas and Petros. – February 5, 2025

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