KOTA KINABALU: Petroliam Nasional Bhd (Petronas) has taken a pragmatic approach in deciding to shut down the Sabah-Sarawak Gas Pipeline (SSGP), according to Sabah Finance Minister Datuk Seri Masidi Manjun.
Masidi explained that Petronas is reassessing its priorities due to persistent challenges affecting the 500-kilometre pipeline that connects Kimanis to Bintulu.
“My understanding is that there are two key reasons for this decision. First, from the very beginning, the pipeline has been plagued by leakages, requiring costly repairs.
“From a financial standpoint, it simply isn’t sustainable. Repairing a pipeline of this scale every time an issue arises costs hundreds of millions of ringgit, making it impractical for Petronas to continue,” he told reporters after attending the Sabah state-level Chinese New Year celebration at the Sabah International Convention Centre.
Petronas recently announced in its 2025-2027 Activity Outlook that it will decommission the RM4.6 billion SSGP, which has been in operation since 2014.
Masidi, who also serves as chairman of state-owned SMJ Energy Sdn Bhd (SMJE), noted that Petronas is now focusing on a new initiative—building the largest near-shore liquefied natural gas (LNG) facility in Sabah at the Sipitang Oil and Gas Industrial Park.
“The Bintulu LNG facility is one of the largest in the world. That’s why, historically, all gas—including Sabah’s—was transported there. But this shift presents a significant opportunity for us.
“In fact, keeping the gas in Sabah will benefit the state even more, as it can directly support local industries and spur economic development,” he said.
