KUALA LUMPUR (Aug 30): Petroliam Nasional Bhd (Petronas) has booked impairment for the partial cessation of the RM4.6 billion Sabah-Sarawak gas pipeline (SSGP), in particular the portion serving Lawas, following a series of incidents which culminated in a force majeure event and a death last year.
The degree of geohazards and soil movement, as well as possibility of further incidents were among key considerations in the decision, Petronas president and group CEO Tan Sri Tengku Muhammad Taufik said.
The rest of the pipeline will continue to service the industries which have not been affected, he said. “The ones in Sabah will continue to enjoy the flow of gas. But I think, so far, of the flow to MLNG Dua, we will not continue anymore.”
Despite the force majeure, “there has been no disruption of deliveries”, he added. “[The] 200 LNG (liquified natural gas) cargoes we delivered [in 1H2023] fulfilled our force majeure volume”.
The company has also decided not to reroute the pipeline for now, with a full evaluation in the works.
“There’s a full evaluation on the options to us to either leave it in situ, with a number of de-energising and removal of hydrocarbon measures; or we take more reparatory measures of partial removal or hybrid solutions,” he said.
“[On] rerouting the pipeline, we have weighed [this option] against bringing on alternative supply, and in fact, it was probably safer, quicker and more reliably deliverable, that we go down a direct supply to MLNG Dua,” Muhammad Taufik said.
“We reported first gas for the Timi [field]; Kasawari is coming on stream in the next 12-18 months. You will also be expecting further upstream [projects] such as Jerun and a number of others that will [see] FID (final investment decision) in the coming years, [which] will make up that gas profile that will service MLNG Dua. It will not be compromised,” Muhammad Taufik said.
“We had to make sure that safety was paramount, [and that] contractual obligations are met,” he added.
The SSGP is a 500-kilometre natural gas pipeline that links Kimanis in Sabah to Bintulu in Sarawak. Constructed in 2011 and completed in 2014, Petronas conducted evaluation as early as in 2015, following incidents reported near Lawas.
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