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SEC largest natural gas supplier in Sabah

Updated: Dec 19, 2022

KOTA KINABALU (Oct 11): Sabah Energy Corporation (SEC) is now the largest supplier and carrier of domestic natural gas in Sabah, and is the main player in Malaysia’s oil and gas industry.

Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said that with the acquisition of the Petronas gas contract in Sabah, the government-linked company, SEC, has become the largest supplier and carrier of domestic natural gas in Sabah, and this shall involve transferring more than 250MMscfd (Million Standard Cubic Feet Per Day) of natural gas to available IPP (Independent Power Producers).

According to him, with a larger customer database and infrastructure control, SEC is ready to expand its gas business in Sabah, in line with the State government’s aspiration to see increase in the involvement of Sabah’s GLCs in the oil and gas industry.

“SEC is involved significantly as one of the main players in the oil and gas industry in Malaysia, in line with the Sabah Maju Jaya (SMJ) aspiration to advance the oil and gas industry in Sabah.

“Hence, the State Government is very pleased with the signing of the various gas agreements with Petronas because it supports the growth of downstream gas industry in the state,” he said at the signing of the agreement to supply natural gas and the exchange of documents for sales and purchase of assets and gas business between Petronas and Sabah Energy Corporation Sdn Bhd (SEC) at the Sabah International Convention Centre (SICC) on Tuesday.

His speech was read by the Local Government and Housing Minister cum Finance II Minister Datuk Seri Panglima Masidi Manjun.

He said that the ceremony which saw the signing of the agreement for natural gas supply and the exchange of agreement documents for sales and purchase and gas business, signified another important achievement for Sabah after the signing of the Commercial Collaboration Agreement (CCA) between the Sabah government and Petronas on 7th December 2021.

“Indeed this is yet another proof of the Gabungan Rakyat Sabah (GRS)-Barisan Nasional (BN) government’s success in forging good relationships with the central government and Petronas, in an ecosystem that complements each other and subsequently enjoy prosperity together.

“Starting for the signing of the Heads of Agreement (HOA) between SEC and Petronas for the supply of natural gas totalling 120 MMscfd that has been achieved before this, the Gas Supply Agreement (GSA) which will provide opportunities to the Sabah government through SEC to take the lead in the marketing and distribution activities of natural gas to attract domestic and foreign investments.

“SEC will play a major role in raising the use of natural gas for manufacturing industry and energy use through natural gas pipelines that will be taken over from Petronas starting on 1 January 2023,” he said.

He said that through the collaborative effort, SEC will own and operate the main downstream natural gas infrastructure in Sabah.

With the acquisition of the natural gas business owned by Petronas, SEC will supply 86 per cent fuel for Sabah’s power generation purposes.

With this, the State Government through SEC will be able to move forward in exploring the full potential of the natural gas industry chain in Sabah that will definitely provide good economic returns to Sabah, and allow Sabah to not only share in a bigger revenue but also bigger participation and control in the issue of oil and gas, Hajiji said.

He added that the energy source based on natural gas is cleaner and competitive compared to other traditional sources such as diesel and Liquid Petroleum Gas (LPG).

Hence, he hoped that industry players in Sabah will benefit through cheaper prices for energy and reduce the cost of running their businesses in the state.

Also, through the use of natural gas, the Sabah government will reduce the rate of carbon release to the atmosphere to achieve net zero carbon emission by 2050, he said.

“It is my aspiration for Sabah to legally place its claim and chart a path that benefits the people and future generations. We will continue to strive for equitable development. Moving forward, the State Government will focus on what needs to be done to identify and develop more infrastructure for future investments, in an effort to create more opportunities and development for the people of Sabah. This will be done through collaboration, with the Federal Government, Petronas and high value investors,” he said.



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