Sabah's Natural Gas: Where It Goes and the LNG Plans
What happens to Sabah's natural gas?
Sabah had over 11.67 Tscf of gas reserves in 2019, about 15% of Malaysia's. Of the 986 MMscfd it produced that year, 45% was committed to export, 37% to petrochemicals, 16% to power and 2% to other industry, according to the state energy plan. A 2 million-tonne-a-year floating LNG plant (ZLNG) is due at Sipitang in the second half of 2027, with Sabah holding 25%.
How much gas does Sabah have?
According to SE-RAMP 2040, Sabah had over 11.67 trillion standard cubic feet (Tscf) of natural gas reserves as of 2019, about 15% of Malaysia's, and produced about 8% of the country's gas in 2018. Sabah's gas is "lean gas", around 90% methane, suited to power generation and methane-based petrochemicals such as methanol, urea and ammonia.
PETRONAS has identified 6.8 Tscf of gas off the west coast that could be monetised from 2020 to 2040. Of that, 62% (4.2 Tscf) is already committed to existing power and petrochemical plants, leaving 2.6 Tscf available for new industries and power plants. SE-RAMP says that is roughly 440 million standard cubic feet a day (MMscfd): about 320 for LNG and 120 for commercial and other uses.
Where does Sabah's gas go?
In 2019 Sabah produced 986 MMscfd of gas. SE-RAMP says it was committed as follows:
| Use | Share, 2019 |
|---|---|
| Export | 45% |
| Petrochemicals | 37% |
| Power generation | 16% |
| Other industry | 2% |
Source: SE-RAMP 2040, printed p.73, from the Sabah Gas Masterplan. For 2021, the plan gives total supply of 784 MMscfd, split 416 domestic (53%, including Labuan) and 368 LNG export (47%).
The plan says the state aims to use more of its gas at home to drive economic activity, while also cutting gas's share of electricity generation from 86% to about 55% by 2035; see Sabah's power plan.
Where does the gas come ashore?
SE-RAMP's 2021 overview lists 19 gas fields, 5 main offshore delivery systems and four onshore gas terminals: the Sabah Gas Terminal (SBGAST) in Tuaran, the Sabah Oil and Gas Terminal (SOGT) in Kimanis, and Labuan Gas Terminals 1 and 2. It also lists two floating LNG units, the Sabah–Sarawak Gas Pipeline from SOGT to the MLNG complex in Bintulu, gas distribution pipelines for KKIP and Ranca-Ranca Industrial Park in Labuan, and a micro-LNG plant in Kota Kinabalu.
What is the LNG plant plan?
SE-RAMP (2023) said PETRONAS was open to building, owning and operating a 2.0 million-tonne-a-year (MTPA) LNG plant in Sabah, with a site chosen after a 2022 study. It estimated such a plant would create about 100 to 150 operations and maintenance jobs (70% to 75% skilled) and up to 360 direct long-term jobs across Sabah, and could pay dividends to the state if it took equity.
Status as of September 2026:
- ZLNG (PFLNG 3): PETRONAS's nearshore floating LNG facility at the Sipitang Oil and Gas Industrial Park (SOGIP), with a capacity of 2 MTPA, is expected to begin operations in the second half of 2027.
- Sabah's stake: the state signed a heads of agreement on 17 July 2025 to take 25% through SMJ Energy, a company wholly owned by the Sabah government, and formalised the stake by November 2025. Sabah Media reported the investment at about USD3.1 billion.
- A second stake: in August 2026 Chief Minister Hajiji Noor said Sabah had reached agreement with PETRONAS for a 40% stake in a floating LNG project in the state, with signing expected within months. The reports did not name the facility; his July 2025 statement had mentioned plans for a 40% stake in PFLNG 1, a separate facility from ZLNG. We have not found a report that the agreement has been signed.
- Gas supply: in September 2026 the Chief Minister said Sabah's gas supply was about 700 MMscfd and expected to reach 1,350 MMscfd by 2030 through seven offshore projects.
The job numbers above are SE-RAMP's estimates for a plant of this size. We have not found official job figures for ZLNG itself.
How does gas reach the east coast?
Sabah's gas fields are off the west coast, and SE-RAMP says piping gas to the east coast is not viable. Instead, east coast users are supplied with LNG from a micro-LNG facility in KKIP, carried by a virtual pipeline system in ISO tank containers to customer sites, each with its own regasification equipment. On the west coast, compressed natural gas (CNG) is delivered by virtual pipeline within about a 70 km radius, and gas reaches five power plants in KKIP and Kimanis (137 MMscfd in total).
SE-RAMP names POIC in Lahad Datu and a planned furniture manufacturing hub in Sandakan as potential east coast gas users. See industrial parks in Sabah.
Frequently asked questions
Q How much natural gas does Sabah have?
Q How much of Sabah's gas is used in Sabah?
Q Is Sabah building an LNG plant?
Q How many jobs will an LNG plant create in Sabah?
Sources & References 5 sources
Last verified: 27 September 2026
LNG status
- Chief Minister of Sabah, media statement, 17 Jul 2025: Sabah to acquire 25 per cent equity in PETRONAS ZLNG Nearshore floating LNG in Sipitang, 2 MTPA; 25% via SMJ Energy; operations expected 2H 2027.
- The Star, 1 Aug 2026: Sabah to sign agreement with Petronas for 40% stake in floating LNG facility Hajiji: agreement reached, signing within months.
- Borneo Post, 18 Sep 2026: Sabah's gas supply expected to hit 1,350 MMSCFD by 2030 About 700 MMscfd now; seven offshore projects.
- Sabah Media, 1 Nov 2025: Sabah formalises 25% stake in PETRONAS PFLNG 3 PFLNG 3 (ZLNG) at SOGIP; SMJ Energy wholly owned by the state; about USD3.1 billion investment.