KUCHING (Nov 18): Utility and Telecommunication Minister Dato Sri Julaihi Narawi has brushed off claims that Sarawak’s call for Petroliam Nasional Berhad (Petronas) to respect its law is an act of blackmail.

“It is neither a threat nor an act of blackmail. It is a legitimate demand grounded in legal rights,” he said.

Speaking at the State Legislative Assembly (DUN) Sitting where he delivered his ministerial winding-up speech, the Sebuyau assemblyman said Sarawak accounted for over 60 per cent of the natural gas produced in Malaysia – of which 94 per cent is used by Petronas to convert into liquefied natural gas (LNG) for export to Korea and Japan to support the industries in these countries.

“However, all the gas produced offshore Peninsular Malaysia are retained for use in the States of Malaya, to support industries and sold for power generation by independent power producers at subsidised rates.

“In stark contrast, only six per cent of Sarawak’s natural gas is allocated for local industries and power generation, with prices dictated by Petronas. Foreign investors who wish to set up industries in Sarawak were repeatedly told that there is no gas available for them.

“Consequentially, these investors chose other destinations for their investments, depriving Sarawak of crucial economic opportunities. Petronas’ gas small allocation for use in Sarawak does not support industrial development in Sarawak,” he explained.

To address this imbalance and ensure adequate supply of gas for local industries and for Sarawak’s energy transition programme, Julaihi said the Sarawak government has developed a Sarawak Gas Road Map and appointed Petroleum Sarawak Berhad (Petros) as the gas aggregator to procure, allocate and distribute gas to ensure that there would be adequate supply of gas for use by industries in Sarawak.

“At the request of the Sarawak government, Petronas has signed a Memorandum of Understanding with Petros to use its best endeavour to allocate 1.2 billion standard cubic feet per day (bscf/d) by 2030 to support the Sarawak Gas Road Map.

“However, until today Petronas has yet to identify where the allocated volume of gas would be sourced and when the gas fields would be developed,” he said.

He also said that since the 1980s, Petronas had not invested in gas distribution infrastructures except to supply to the LNG plants to produce LNG for exports.

“Hence, Petros had to build a pipeline from Bintulu to deliver gas to Samalaju for both power generation and to support the heavy industries there,” he added.

He stressed the Sarawak government has always called for collaboration between Petros and Petronas but the recent conduct and action by Petronas does not demonstrate the national oil company intends to have an amicable solution.

“Regrettably, Petronas does not seem to respect and abide by our laws such as the Distribution of Gas Ordinance 2016 or to cooperate with Petros to enable Petros to carry out its statutory functions in the interests of Sarawakians.

“Compliance with these legal frameworks is not optional — it is a statutory duty that must be honoured by all parties,” he said.

He said since the enforcement of the Petroleum Development Act 1974 (PDA), the cumulative value of petroleum produced and obtained in Sarawak by Petronas and the federal government up to 2014 was RM1 trillion, with only 5 per cent or RM 50 billion thereof returned to Sarawak in the form of cash payment pursuant to Section 4 of the PDA.

“With such enormous contribution to the national coffers, Sarawak deserves better attention, treatment and support from Petronas.

“The least Petronas should do is to comply with our laws when operating in Sarawak and allocate and make available more gas to support the industrial development of Sarawak and its transition towards a green economy,” he said.

Earlier in his speech, Julaihi said the Sarawak government’s ongoing efforts to defend its rights to natural gas resources must be respected and cannot be disputed by all parties, including Petronas and biased individuals.

“These rights, which are based on Sarawak laws that are still in force until now, are very important in ensuring the government’s efforts to be fully in control natural gas resources for the well-being of the people of Sarawak in particular and Malaysia in general.

“Therefore, I would like to reiterate that the appointment of Petros as the sole gas aggregator is final and non-negotiable. This means that there is no other gas aggregator in Sarawak except Petros,” he stressed.

He said it was high time that Malaysian leaders open their eyes and minds to see a more comprehensive national development perspective and not one that is tied to the development perspective around Putrajaya and Kuala Lumpur alone.

“Malaysia comprises of the Peninsula, Sarawak and Sabah. Therefore, this is not just about talking about the interests of Sarawak alone but also about strengthening and improving the economic sector throughout the country,” he remarked.