Petronas LNG and SMJ Energy Sign Agreement for FLNG Project in Sabah

Petronas LNG, a subsidiary of Malaysia’s state-owned giant Petronas, has signed a heads of agreement (HoA) with compatriot SMJ Energy, enabling the latter to participate in a floating liquefied natural gas (FLNG) project off the coast of the Malaysian state of Sabah.

The deal envisages SMJ Energy’s acquisition of a 25% interest in PFLNG 3, the company developing the ZLNG project, also known as PFLNG 3. This is a nearshore FLNG project under development, which will be located in the Sipitang Oil & Gas Industrial Park (SOGIP), Sabah.

The agreement was signed by SMJ Energy’s Chief Executive Officer (CEO) Dionysia Aloysius Kibat and Petronas LNG’s CEO Shamsairi M Ibrahim. Definitive agreements are expected to follow the HoA, formalizing the deal.

Strengthening Partnerships and Responsible Development

As SMJ Energy is owned by the Sabah State Government, Petronas sees this as a step forward in strengthening its partnership with the State Government and the responsible development of resources in the state.

PFLNG Tiga: Malaysia’s Third FLNG Unit

In February 2025, Samsung Heavy Industries (SHI) held the hull launching ceremony for the liquefaction unit to be deployed at the project, dubbed PFLNG Tiga. The unit was ordered by Petronas in December 2022, following a front-end engineering and design (FEED) tender in 2021.

Said to be Malaysia’s third FLNG unit, PFLNG Tiga is 281 meters long, 64 meters wide, and 32 meters deep. It is said to be 2.5 times larger than a soccer field (105 x 68 meters) with a launching weight of approximately 50,000 tons.

The unit is expected to produce 2.1 million tonnes of gas per year off the coast of Sabah once it comes into operation, which is scheduled to take place in May 2027.

Future Operations and Sustainability

According to Wood Mackenzie, the initial supply for the floating facility will be sourced from the existing Kebabangan field, which started production in November 2015. The volumes from the field are expected to sustain the plant at peak production until 2033.

Petronas has been busy with another floating unit – the floating storage and offloading (FSO) vessel Permata Dulang, for which a naming ceremony was recently held. The FSO will replace an older unit that has been working at its oilfield offshore Malaysia for three decades.