State-owned Petros takes full control of gas businesses in Sarawak from Petronas

Petros CEO Datuk Sauu Kakok (seated, left) and Petronas senior vice president Mohamed Firouz Asnan sign the domestic gas agreement, as Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan (standing, third right) looks on, in Kuching February 12, 2020. — Picture by Sulok Tawie
Petros CEO Datuk Sauu Kakok (seated, left) and Petronas senior vice president Mohamed Firouz Asnan sign the domestic gas agreement, as Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan (standing, third right) looks on, in Kuching February 12, 2020. — Picture by Sulok Tawie

KUCHING, Feb 12 — State-owned Petroleum Sarawak Berhad (Petros) has taken over the control and authority of the supply, sales and distribution of natural gas within the state following the signing of a domestic gas agreement with Petroliam Nasional Berhad (Petronas) today.

The takeover was effective January 1 this year.

With the signing of the agreement, Petros is now the single entity to supply, sell and deliver domestic gas to Sarawak homes, businesses and industries.

“With this, Sarawak is now in a strong position to enhance the attractiveness of the state as a preferred investment destination and to leapfrog our economic development towards a high income economy by 2030,” Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said at the signing ceremony.

“Today, we have achieved the policy goal of the state’s Distribution of Gas Ordinance 2016 (DGO 2016) for stewardship of our resources,” he said, adding that the state government welcomes Petronas’ continued collaboration with Petros to strengthen the Sarawak oil and gas sector and the firm commitment to a win-win outcome.

Awang Tengah, who represented Chief Minister Datuk Patinggi Abang Johari Openg at the ceremony, said natural gas is the “Crown Jewel” of the state’s petroleum resources where it holds 54 per cent of the total national gas reserves and 29 per cent of the total national oil reserves.

“However, most of the oil and gas resources are exported as crude oil and LNG, with very little downstream value adding activities. This is not sustainable in the long run,” he added.

“With this arrangement, we can now leverage on our gas resources to accelerate our economic development through more high value downstream petrochemical activities,” Awang Tengah said, noting that the state aims to retain 40 to 50 per cent of all new gas discoveries in Sarawak for its downstream high value adding activities.

He said gas that is being produced in Sarawak should be used to power its plants and feed the petrochemical facilities, adding that natural gas as a cleaner burning fossil fuel, can also improve the efficiency of many industries.

“The state plans to establish a robust downstream petrochemical industry to increase participation in the higher value chain and thus, creating a more sustainable development for Sarawak, amidst the declining resources.

“With the existing infrastructure facilities in Bintulu, Sarawak can take advantage of the availability of our natural gas resources as feedstock and make Bintulu a thriving and vibrant O&G hub in the region,” Awang Tengah said, adding that apart from Bintulu, the state government is also looking into other regions to set up petrochemical hubs.

“With this latest development, Sarawak can now attract more investments in oil and gas downstream industries by making available more gas as feedstock, as well as other high value industries where gas is required for processing.

“In the past, we have missed out many such investment opportunities because we are not able to secure the supply of gas for them,” he said, adding that Petros must now work hard to ensure that there will always be a sufficient supply of gas for industrial, commercial and residential requirements.

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