Switching from diesel to LNG
- Jun 29
- 2 min read
Published on: Saturday, June 27, 2026
By: Sherell Jeffrey
Kota Kinabalu: Sabah is exploring the expansion of small-scale Liquefied Natural Gas facilities to supply domestic consumers and industries, reducing the State’s dependence on expensive diesel.
“The existing micro-LNG plant in Kota Kinabalu is operating and processing two million standard cubic feet of gas per day,” said Energy Commission of Sabah (ECoS) Chief Executive Officer Datuk Abdul Nasser Abdul Wahid.
“There are plans for expansion, depending on the right price and the right location,” he said at the 13th Sabah Oil, Gas and Energy Conference and Exhibition’s Executive Plenary Session at the Sabah International Convention Centre.
He said they have always promoted this, but the central question is ensuring Sabahans and industries could benefit from the State’s own gas resources rather than paying a premium for diesel-generated energy.
He said ECoS is working with Petronas on how to leverage domestic LNG utilisation while balancing the commercial case for exports.
He noted that economies of scale remained a consideration, with larger LNG facilities potentially offering more competitive pricing for domestic supply. The viability of any expansion would depend on delivered pricing to end destinations.
Sabah has long been associated with high electricity costs tied to diesel generation, particularly in rural and remote areas.
The push for domestic LNG access forms part of a broader strategy under the Sabah Energy Roadmap and Masterplan 2040 to reduce the cost of energy for consumers and businesses across the State.
Additionally, he said Sabah is redirecting its natural gas allocation away from near-total dependence on power generation toward industrial use, in a policy shift that is already drawing foreign investment into the State.
“This change is deliberate and timely, with international companies already responding to the new direction.
“We see companies from overseas coming in, such as Kibing and Esteel, using a lot of gas, which we allowed,” he said.
The reallocation also opened pathways for liquefied natural gas exports and downstream petrochemical investment, areas he said the State is actively exploring in cooperation with Petronas.
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