Negotiate a Separate Deal on Sabah, Sarawak's LNG – Dr. Jeffrey

Kota Kinabalu:    “Sabah and Sarawak should negotiate a separate and better deal for their natural gas resources so that they have an additional opportunity to catch up on their development and to give Sabahans and Sarawakians a fighting chance to progress and advance from their resources” said Datuk Dr Jeffrey Kitingan, STAR Sabah Chief, cum Bingkor State Assemblyman.

Currently, Sabah and Sarawak is producing almost all of Malaysia’s natural gas, the bulk of which is exported and the rest going to Malaya where West Malaysians get to enjoy lower electricity tariffs due to the RM19 billion gas subsidy for Independent Power Producer (IPP) companies.

The extent of the RM19 billion gas subsidy is mind boggling.   With a population of 3.2 million, Sabah probably has only about 640,000 households based on a family of 5.   Imagine if RM1.0 billion subsidy is given to Sabahans, all the 640,000 households in Sabah will enjoy free electricity of RM130.21 per month for a year.   

“Imagine if the RM19 billion subsidy is divided into 3 portions and Sabah and Sarawak get RM6.33 billion each annually” pondered Dr. Jeffrey.

Unfortunately, in reality, Sabahans and Sarawakians get nothing, a big fat 0, for all their natural gas resources.

Petronas reported recently that Malaysia’s gas reserves in Malaysia is about 100 trillion cubic feet (TCF) of which Petronas produces 2.0 TCF a year.   At this rate, Malaysia’s natural gas reserves will last for another 50 years even without any new discoveries.   It is closely kept information that almost all of the 100 TCF is located in Sabah and Sarawak.   

However, given Sabah and Sarawak’s petroleum discoveries to-date, it is likely that the natural gas reserves would be several times more than 100 TCF.   Even natural gas is now found on-shore in Tungku, Lahad Datu, where Petronas has started a re-gasification plant with funds from the National Budget.

If Petronas and the federal government continue to exploit Sabah and Sarawak’s natural gas reserves with the current conditions, it will mean that Malayans will continue to receive indirect subsidies for the next 50 years, assuming no new discoveries, and Sabahans and Sarawakians will not receive a single sen of benefit from its gas for the next 50 years.

“Is there any difference between Petronas and the federal government compared to daylight highway robbers or pirates of the high seas” asked Dr. Jeffrey.    In fact, a cartoonist had described the federal government as “Pirates of the CarryBN” mocking the popular movie series ‘Pirates of the Carribean’.

Given what we now know, it is only right, legally and morally, for the Sabah and Sarawak governments to negotiate a separate fairer and more equitable deal for Sabah and Sarawak’s natural gas so that Sabahans and Sarawakians get a chance to benefit from the natural gas coming out from their territories.