KUALA LUMPUR (Aug 25): Petronas and its Sarawak state counterpart will have one month to negotiate gas supply rights after the court adjourned a hearing on the dispute on Monday.
The joint request for adjournment was granted “to allow the ongoing negotiations between the parties to continue”, the national oil company also known as Petroliam Nasional Bhd said in a statement.
“The parties are still involved in discussions with an aim of bringing matters to resolution,” the statement said.
Petronas and Petroleum Sarawak Bhd, or Petros, have asked the court to determine the rightful recipient of payments for gas supplied to Shell MDS (Malaysia) Sdn Bhd’s facility in Bintulu.
A gas supply agreement was signed between Petronas and Shell MDS in 2020, but Petros later signed another agreement with Shell MDS in 2024 after it was given a mandate by the Sarawak government to act as the sole gas aggregator in the state.
The court has since instructed Petronas to continue supplying gas to Shell MDS despite not receiving the monthly payments that could reach RM70 million-RM100 million. Petronas is disputing the injunction order.
The dispute escalated amid increasing pressure by Sarawak to have a bigger control over its oil and gas resources, including having a greater share of returns including through a higher portion of gas supply for domestic development.
Sarawak, which holds over 40% of the country’s gas reserves, also exports liquefied natural gas via contracts held by Petronas.
A discussion between Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg earlier this year resulted in Petros being the aggregator of gas in the state.
At the same time, both governments said they will recognise the Petroleum Development Act as “a federal Act as stated in the provisions of the law” and assured that existing export contracts will not be affected.