BA’ Kelalan assemblyman Baru Bian said he is resigned to Petronas’ decision to permanently shut the Sarawak portion of the RM4.6 billion Sabah-Sarawak gas pipeline (SSGP).

The 500km pipeline transports natural gas mined in Sabah waters for processing at the MLNG Dua liquefied natural gas (LNG) processing plant at the Malaysia LNG (MLNG) complex in Bintulu.

The SSGP is a 500km natural gas pipeline that links the Sabah oil and gas terminal in Kimanis to MLNG Dua.

The pipeline is part of the Petronas’ Sabah-Sarawak integrated oil and gas development project that started its operation in early 2014.

Baru described it as an “unfortunate decision” as the closure would mean a lot of young people in that part of rural Baram who would be out of a job.

“The Petronas presence in my area has brought great benefits to our people in the form of employment for many young people and much assistance to the village folk and churches through their corporate social responsibility (CSR) activities,” he said.

The Parti Sarawak Baru (PSB) secretary-general said he had hoped Petronas would instead take the necessary steps to improve the structure and safety of the pipeline following a series of incidents which culminated in a force majeure event and a death last year so that operations could continue.

“Unfortunately, it has decided to permanently cease operations on this (Lawas) stretch instead,” he said when asked to respond to a news report in which Petronas president and group CEO Tengku Muhammad Taufik Aziz said the national petroleum company had booked impairment for the partial cessation of the SSGP, in particular the portion serving Lawas.

Tengku Taufik said the degree of geohazards and soil movement, as well as possibility of further incidents, were among key considerations in the decision.

Baru said he understood that Petronas had done its investigations and taken into consideration serious factors such as the degree of geohazards and soil movement before making their final decision.

“It must be a difficult decision but I commend the company for prioritising the safety of the project, and therefore the safety of our people, in coming to their conclusion.”

On November 16 last year, a worker performing earth work near the pipeline’s right-of-way (ROW) area designated as “KP32”, was killed in a fire and explosion from a leak in the pipeline.

The earth work allegedly caused some soil movement and the pipeline to become misaligned.

“I have been equally concerned about the incidents of leakage and explosion that had occurred along this stretch over the years since operations started and had impressed upon Petronas not to compromise on safety.

“As this project had cost billions to implement, I hope Petronas will reconsider its decision to halt this project,” he said.

He also thanked the company for assisting “his people” for the duration it was operating in Lawas.

Baru earlier said he had, since 2014, pressed Petronas to improve on the safety of the pipeline, as there had been at least five incidents of leakage and explosion – the last one being in September 2022.

An August 30 report in The Edge Malaysia said the pipeline in Sabah will continue to service the industries which have not been affected.

Despite the force majeure, Tengku Taufik said there has been no disruption in delivery, pointing out that 200 LNG cargo delivered in the first half of 2023 “fulfilled our force majeure volume”.

He also said Petronas has decided not to reroute the pipeline for now, with a full evaluation in the works.

He said in rerouting the pipeline study, it had weighed this option against bringing on alternative supply.

Tengku Taufik said it was probably safer, quicker and more reliably deliverable that Petronas “go down a direct supply to MLNG Dua”.

He said despite the pipeline’s shutdown, the MLND Dua would not be decommissioned, citing more gas fields, such as the Timi field, Kasawari which had been reported to be coming onstream in the next 12-18 months and final investment decisions on upstream projects such as Jerun.

He said these will make up the gas profile that will service MLNG Dua.

Petronas reportedly conducted an evaluation as early as in 2015, following a series of incidents reported near Lawas. – September 1, 2023.