Abg Jo: Talks on gas distribution between Petronas, Petros ongoing, to conclude soon

KUCHING (Oct 21): Discussions between Petroliam Nasional Berhad (Petronas) and Petroleum Sarawak Berhad (Petros) regarding gas distribution in Sarawak are still ongoing and expected to be concluded soon, says Datuk Patinggi Tan Sri Abang Johari Tun Openg.

The Premier says the present negotiation involved technical arrangement between the state and national oil and gas company.

“It is just a matter of technical arrangement between Petros and Petronas which will be concluded soon,” he told CNBC Asia senior correspondent Sri Jegarajah in an interview on the sidelines of the Singapore International Energy Week (SIEW) 2024 in Singapore today.

When asked if the issue of distribution of gas between Petronas and Petros would need to be settled by arbitration, Abang Johari said “no”, explaining that Sarawak operates under two laws in this instance.

“One is the Petroleum Development Act 1974 (PDA) and the other is the Oil Mining Ordinance 1958 (OMO).

“OMO has existed earlier than the PDA and even before Malaysia was formed. This law is still valid, and we have not repealed it. So, this means that it has to co-exist with the PDA and we will give an exemption in terms of distribution of gas domestically,” he said.

He also said that Sarawak has the Distribution of Gas Ordinance under which Petros has been appointed as the aggregator, a function which has been taken over from Petronas.

“At the moment, there is an arrangement between Petronas and Petros to find a formula between the two, and they collaborate together to manage gas,” he added.

On the discovery of oil and gas fields in Balingian province, off the coast of Sarawak, Abang Johari said this new discovery brings forth a lot of potentials in developing gas-based industries for Sarawak.

“That is why at the moment, we have a new methanol plant, which is one of the biggest, where we produce 5,000 tonnes of methanol per day.

“The discovery of gas will boost our petrochemical industries. One in the pipeline after methanol will be ammonia. And you know very well that in this period of energy transition, we need eco-friendly fuel.

“I think Sarawak is blessed with that gas and we are contributing towards world need for cleaner energy for the overall economy,” he said.