Petronas and Sabah Oil & Gas Development Corporation (SOGDC) have inked a memorandum of understanding for the first and largest nearshore floating liquefied natural gas (LNG) facility to be deployed offshore Sabah, Malaysia.
The project, known as ZLNG, would be located at Sipitang Oil and Gas Industrial Park (SOGIP) and is estimated to cost around MYR8.8bn ($2.02bn ). It is currently in the front-end engineering and design (FEED) stage and is targeted to complete a final investment decision at the end of this year. Under the deal, Petronas and SOGDC would cooperate in realising the project, which included SOGDC assisting Petronas in securing all necessary approvals, permits, and/or utilities as SOGIP developer.
“The floating LNG facility will create multiple spin-offs for the state. It will unlock potential future businesses such as tank regional distribution and bunkering, and potentially provide return to participating parties and expand the LNG Virtual Pipeline System (VPS) in Sabah,” Joachim Gunsalam, deputy chief minister of Sabah and minister of industrial development, said in a statement.
The nearshore LNG plant is planned to be ready for start-up by the end of 2026. Upon completion, the plant will increase Petronas’ LNG production from floating LNG facilities from 2.7m tonnes per annum to 4.7m. Currently, Petronas operates two floating LNG facilities, the PFLNG Satu (pictured) and PFLNG Dua, at the Kebabangan and Rotan offshore gas fields, respectively.