SARAWAK and Petronas today signed papers to realise the state’s demand for a 10% equity in the national oil corporation’s LNG 9 liquefied natural gas production train in Bintulu.

Sarawak Chief Minister Abang Johari Openg, who witnessed the signing of the term sheet at his office at Wisma Bapa Malaysia in Petrajaya, lauded the signing, saying it was part of the state’s successful negotiations with Petronas over its desire to have a greater participation in the oil and gas industry in the state.

The demand for the 10% equity was mooted by former chief minister Adenan Satem.

Currently, Sarawak holds 10% equity the LNG 1 and 3 trains.

State Financial Secretary Ahmad Tarmizi Sulaiman and Petronas senior vice-president of Corporate Strategy M Firouz Asnan signed the term sheet.

A term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment will be made.

It serves as a template to develop more detailed legal documents as once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.

Witnessing the signing, too, was Petronas president and group CEO Wan Zulkiflee Wan Ariffin.

The LNG9 train, which started operations last year, has a production capacity of 3.6 million tonnes per annum (MTPA).

LNG9’s production has boosted the total output capacity of the LNG complex at Tanjung Kidurong in Bintulu to 30MTPA.

At the same event, a memorandum of understanding for a logistics collaboration between Petronas Chemicals Marketing Labuan (PCML) Ltd and Sarawak-based Hubline Bhd was also signed.

It will enable Hubline to join PCML’s panel of transporters for petrochemical products.

Petronas, in a statement, stated the signing for the equity and the transportation MOU underscored the “long-standing partnership and collaboration” between them and the Sarawak government, particularly in developing and adding value to hydrocarbon resources in the state. – January 15, 2018.