Petros to build gas hubs
25 Oct 2022
Petroleum Sarawak Bhd (Petros) is targeting to develop four gas hubs in Miri, Bintulu, Samalaju and Kuching in its effort to spur the state’s economic activities.
Through the hubs, Petros will deliver a state-wide access to gas supply and clean energy, according to Sarawak Premier Datuk Patinggi Abang Johari Tun Openg.
For the immediate term and as part of Sarawak gas roadmap, Abang Johari noted state-owned Petros would deliver its first project for the Miri Hub – a 400MW power plant – to ensure northern Sarawak’s energy security.“For the Samalaju Hub, Petros will lay gas pipeline and also, together with Sarawak Energy Bhd (SEB) to build a power plant. This is critical to complete Samalaju as a heavy industry zone.
“The projects alone will require investment of around RM6bil.
“Over 10 years across the four hubs, the total projected investment is RM65bil, inclusive of downstream value-added industries,” added Abang Johari at a recent Petros’ fifth anniversary celebration dinner.
The Samalaju Industrial Park in Bintulu under the Sarawak Corridor of Renewable Energy is home to energy-intensive industries such as aluminium and ferroally smelters.
Abang Johari is also confident that the Sarawak gas roadmap will be a game changer for Sarawakians as it is a key supporting pillar in Sarawak’s aspiration to become a high income and advanced state in Malaysia.
He noted Petros, which achieved a revenue of RM1.2bil last year, is among the ranks of the billion-ringgit companies with a robust financial performance and a Triple-A rating.
Petros is on a journey of rapid growth, which it has funded with its own equity and funding, he added.
“Petros has also grown its equity in hydrocarbon resource base. In the offshore exploration and production space, Petros has three offshore production-sharing (PSC) contracts and three offshore exploration PSC. Petros is also pursuing several other opportunities.
“In the onshore exploration and production space, Petros remains as regulator but also with participating interest through its subsidiary – Petroleum Sarawak Exploration and Production (PSEP) – in the existing block SK433 located in Miri-Baram area.
“I am excited that after 20 years of inactivity in onshore Sarawak, we will be drilling again next year in Miri,” added Abang Johari.
Under the commercial settlement agreement signed between Petroliam Nasional Bhd (PETRONAS) and Petros two years ago, Petros is empowered to develop the potential of oil and gas (O&G) onshore.
The agreement also includes Sarawak’s equity participation in offshore operations and the assurance that 25% of the state’s gas is prioritised for Sarawak’s domestic needs.
In the downstream O&G sector, Petros is a major player in the domestic gas market.
Petros Niaga is the No. 1 liquified natural gas operator, currently with 65% market share in Sarawak.
As domestic gas aggregator under Sarawak domestic gas ordinance, Petros has been delivering gas to households and industries in Miri and Bintulu since 2020.
“Our downstream business is all about scale, as margins are small, more so with bigger market share, we expect better and reliable service to customers.”
PETRONAS had also signed a collaboration agreement with Petros for a carbon capture utilisation and storage (CCUS), which is the first step to enable the green economy.
He said Sarawak is blessed with geological structures that are suitable to store carbon dioxide (CO2),and that its potential for CCUS could be at world-scale.
“The CCUS sites are part of state land and hence belongs to Sarawak. I would like Petros, given its technical skills, to be the resource manager for CCUS with the support of the relevant ministries.
“The CCUS industry will promote the development of the state’s massive gas resources, which contains CO2 to secure long-term energy security for the state, create more domestic jobs through green industry and provide another revenue source to Sarawak.
“CCUS is a key enabler to achieve net-zero (emission) by 2050 as we transition away gradually from carbon-based fossil fuels,” said Johari.
Meanwhile, Petros chairman Tan Sri Hamid Bugo said Petros has signed a PSC contract with PETRONAS to acquire a 45% equity in Block SK407 located offshore Miri, effective Jan 1, 2023.
He said the deal is a pivotal step to increase Sarawak’s access to adequate hydrocarbon resources to propel the realisation of the Miri hub development.
In addition, Petros has executed a head of agreement with PETRONAS for the sale and purchase of gas sourced from offshore Sarawak for the planned 400MW power plant in Miri.
He said Petros’ focus would be to make O&G as Sarawak’s engine of growth for the state’s economic and social development as well as to create more jobs for the people.
Source: The Star