Sabah Acquiring 25 Per Cent Equity In PETRONAS ZNLG Facility

SMJ Energy's growth trajectory since the signing of the Commercial Collaboration Agreement (CCA) with PETRONAS in December 2021 has been rapid. On 17 July 2025, Sabah Government and Petronas, signed the Head of Agreement (HOA) in Kuala Lumpur, which gives Sabah a 25 per cent equity in the USD3.1 billion nearshore floating liquefied natural gas (ZLNG) facility in Sipitang, Sabah.

ZLNG – which is still under construction - will commence operations in mid-2027, with a capacity of 2 million tonnes per annum (MTPA). The facility will be managed by SMJ Energy which has two other floating LNG facilities, PFLNG1 (1.2 MTPA) and PFLNG2 (1.5 MTPA), operating in Sabah waters. (SMJE) will also acquire a 40 per cent participating interest in PFLNG1 by 2025. SMJ Energy holds 50 per cent equity in the Samarang PSC oil production asset, 10 per cent equity in LNG9, 25 per cent equity in the SAMUR petrochemical complex and full ownership of Sabah International Petroleum (SIP), which operates both the FPSO and FSO assets. In addition, SMJ Energy holds free carry and back-in rights in exploration blocks SB409 (20%), SB403 (20%), SB306A (15%) and SB306B (15%).

Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor, who witnessed the signing ceremony, said: "This partnership marks another significant milestone to ensure Sabah’s long-term development goals, promoting industrial growth and energy security and creating new opportunities to drive Sabah’s progress. Through strategic investments like ZLNG, we will strengthen the state's economic resilience while ensuring that the benefits of Sabah's natural resources directly contribute to the well-being of our people.”

Datuk Dr Dionysia Kibat, Chief Executive Officer of SMJ Energy said that Sabah’s entry into ZLNG is part of the State’s strategic plan to further diversify and strengthen its position in the upstream, LNG, and petrochemical sectors. "This plan aligns with our mandate to generate long-term, stable cash flows from high-quality, cash-generating assets," Dionysia said. Sabah's downstream ambitions are also advancing rapidly. Sabah Energy Corporation (SEC), the state's gas aggregator and distributor, plays a crucial role in ensuring a stable domestic gas supply for Sabah's industries.

One of its landmark projects is supplying gas to E-Steel's RM31 billion green steel plant at the Sipitang Oil and Gas Industrial Park (SOGIP), a key investment supporting Sabah's move toward industrial diversification.Prime Minister Datuk Seri Anwar Ibrahim launched Phase 1 (RM6.4 billion) of Esteel Enterprise Sabah Sdn Bhd’s project in May 2025. Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) is a subsidiary of Singapore’s Green Esteel Pte Ltd. Sabah’s aggressive drive in the O&G and energy sector will create a wide range of ripple effects extending beyond green technology to spur innovation, drive benefits for businesses and communities in Sabah. The ongoing industrial transformative projects are major steps towards creating economic spin offs and further enhance the livelihood of the people in Sipitang, in particular, and in Sabah, in general, from green technology innovation to job creation and community development.