3 days ago
Sarawak must move beyond upstream O&G, says Petros VP
Joseph says Sarawak's shallow industrial base limits the state's economic resilience because it relies heavily on primary sector activities. – Bernama photo
KUCHING (July 16): Sarawak has yet to tap its full potential in the oil and gas sector as the focus remains largely on upstream activities, said Petroleum Sarawak Bhd (Petros) Senior Vice President of Growth, Datuk Joseph Podtung.
He said Sarawak's shallow industrial base limits the state's economic resilience because it relies heavily on primary sector activities.
'Extract, export, repeat. That's the cycle. No strong mid or downstream development, no supporting service ecosystem, and no multiplier effect.
'If we keep exporting, we miss out on far greater opportunities. Developing domestic industries will create value chains, jobs and innovations. That is how we build long-term resilience.
'This is not about choosing between LNG and domestic use. It's about unlocking more. More for Sarawak's own use. More retained value. More future-proofing.
'It benefits not just Sarawak, but Malaysia as a whole. We are shifting from a volume mindset to a value mindset,' he said during the plenary session titled Sarawak Gas Roadmap: Unlocking the Potential of Natural Gas for a Sustainable Future at International Energy Week 2025 held here on Tuesday.
Joseph added that natural gas is the key for Petros to move downstream, develop hydrogen, and power new industries across Sarawak.
He outlined four regional hubs as part of the Sarawak Gas Roadmap, each with its own role in expanding the state's energy ecosystem.
In Miri, onshore gas drilling resumes after 30 years, alongside a 500-megawatt power plant due by 2027.
In Samalaju, the Bintulu-Samalaju pipeline, set to complete this year, will power heavy industries. Bintulu is advancing downstream with a methanol plant already running.
However, in Kuching, he highlighted that despite being the capital of an energy-rich state, it has no pipelines and still depends on imported liquified petroleum gas and fossil diesel.
'Without action now, Kuching risks being left behind in the shift to a low-carbon economy. But Kuching has what matters, access to clean power, liveability that attracts talent, and proximity to 30 per cent of global maritime trade,' he said.
Joseph said Kuching's low-carbon development will take place in three waves.
The first wave will see the LNG-to-power project begin. LNG will be delivered via a floating storage and regasification unit and a subsea pipeline, supplying gas to a new combined cycle power plant. This will provide reliable, low-carbon electricity for Kuching and the wider Borneo region.
The second wave builds on this foundation by developing a low-carbon industrial park to attract high-value industries. These include low-carbon petrochemicals, hydrogen clusters and digital sectors.
'And the final phase will transform Kuching's low-carbon hub into a global destination for investment, focusing on high-value added downstream products, such as low-carbon hydrogen for steel manufacturing, and low-carbon ammonia for fertilisers and other specialty chemicals,' he said.
He also revealed that a global master planner will be appointed to develop the master plan for the Kuching Low-Carbon Hub and Deep Sea Port.
Petros has previously secured two anchor partners, China Jiangsu International and Sumitomo Corporation to provide capital, capabilities and global investor networks to develop the Kuching Low-Carbon Industrial Hub.
'By anchoring demand in Kuching, it opens the need to further develop offshore resources. We have a demand-led pathway to unlock the untapped reserves of Western Sarawak, both natural gas and the CCS development,' he said.
At its full scale, the SGR is expected to attract RM300 billion in investments and generate RM120 billion in annual output, which he said is close to what the Johor-Singapore Special Economic Zone is projected to produce at RM125 billion. downstream oil and gas Petros Sarawak
