Sabah Acquires Stake in Petronas’s ZLNG Project

The Malaysian state of Sabah has made a significant move by acquiring a 25% stake in Petronas’s upcoming FLNG facility, known as ZLNG, with an estimated cost of $3.1 billion. This strategic decision marks a key partnership between Sabah and Petronas in the energy sector.

The acquisition process will be facilitated through SMJ Energy, which has signed a head of agreement with Petronas to formalize the deal. The ZLNG project, with a planned capacity of 2 million tonnes per annum, will be located nearshore in Sipitang and is currently in the construction phase, aiming to commence operations in the latter half of 2027.

Notably, Sabah already hosts two existing FLNG projects, namely the 1.2 mtpa PFLNG1 and the 1.5 mtpa PFLNG2. In a further display of commitment, the state government has expressed its intent to acquire a 40% interest in PFLNG1 through the same entity, with due diligence scheduled to commence in the second half of 2025.

Chief Minister Seri Hajiji Noor emphasized the strategic importance of such investments, stating, “Through strategic investments like ZLNG, we will strengthen the state’s economic resilience while ensuring that the benefits of Sabah’s natural resources directly contribute to the well-being of our people.”