STATE MUST STOP PIPING GAS TO SARAWAK ONLY TO BUY IT BACK

‘Sabah needs own gas pipeline’

February 21, 2011 KOTA KINABALU: Sabah must have a gas pipeline connecting Kimanis and Sandakan or it may end up competing with foreign countries for liquefied natural gas (LNG) from Bintulu, according to opposition leader Yong Teck Lee.

Yong, a former chief minister of the state, called on the state government to get Sabah out of the ironical situation of piping natural gas to Bintulu only to buy it back as LNG.

His remarks were occasioned by the government’s announcement that it had opted for a gas-powered plant in Sandakan to meet Sabah’s electricity needs instead of a coal-powered plant in Lahad Datu.

“If our gas power plant in Sandakan has to rely on LNG from Bintulu, then Sabah will have to compete with foreign countries for the LNG,” Yong said. “Obviously, prices and energy security will be uncertain.”

Sabah natural gas lands at Kimanis and is piped through a RM1.6 billion, 500km pipeline to Petronas’s LNG complex in Bintulu. The complex, with a capacity of 25 million tonnes per annum, is one of the biggest of its kind in the world.

“That complex exports LNG to Japan, South Korea and China, three lucrative markets for Petronas,” said Yong.

If Sabah Electricity Sdn Bhd were to play less than the international market price for LNG, then “disputes over subsidies” would arise, he added.

“We currently have an ironical situation whereby if the market prices for our own petroleum go up, then we end up paying more for the fuel.”

He said Sabah, as a producer of petroleum and gas, should profit instead of suffer when the prices of these commodities rose.

Profit-making giant

Yong, who leads the Sabah Progressive Party (SAPP), scoffed at Chief Minister Musa Aman’s explanation about Sarawak taking Sabah gas and giving it back in the form of LNG, saying he was being simplistic.

He said neither the gas nor the LNG was controlled by either of the two state governments, “but by Petronas, which is a profit-making giant that is a government within a government.”

He said it was SAPP’s view that a gas pipeline from Kimanis to Sandakan would be the best long- term solution.

“We reject the excuse that a Kimanis-Sandakan pipeline is costly because it will cost much less that the pipeline to Bintulu.”

Yong also noted that the federal government had guaranteed Sabah that it would get all the natural gas that it needed, that only surplus gas would be piped to Bintulu.

“Even the pipeline to Bintulu was supposed to have provisions for Sabah’s own domestic needs,” he said.

“These were the guarantees given to Sabah in 2008 when the then prime minister (Abdullah Ahmad Badawi) reneged on his promise to scrap the Bintulu pipeline project.

“Having lost three million acres of oil rich maritime territory in Oil Blocks L and M to Brunei recently, Sabah has every right to demand that we have all of our remaining natural gas for our own needs.

“Petronas, by the way, will be profiting from the joint exploitation of Oil Blocks L and M with Brunei.”