Petronas and Sabah Energy have terminated previously announced proposal to construct RM1bn ($241m) liquefied natural gas (LNG) terminal in Lahad Datu, Sabah, East Malaysia.
Petronas Gas said in a filing to the stock exchange: "In view of the prolonged uncertainty of the Regasification Terminal Lahad Datu Project, the parties to the shareholders agreement for the regasification terminal, Petronas Gas and Sabah Energy, have mutually agreed to terminate the agreement effective 10 February 2016."
Under the agreement, which was originally signed on 10 September 2012, the two companies planned to carry out the project through Petronas’s unit Regas Terminal (RGT).
As per the original plan, the facilities were scheduled to be completed in 2015 and targeted to have annual production capacity of 0.76 million tonnes.
The LNG terminal planned to supply gas to an adjacent 300MW combined cycle power plant in Lahad Datu.
Sabah energy was offered to acquire up to 20% stake in the project.
The overall coordination and strategic management of the project was planned to be taken up by RGT, which would also own, operate as well as maintain the facilities.
However, Petronas announced that the project was put on hold after the Lahad Datu armed intrusion in February 2013.
The military conflict started on 11 February 2013 and ended on 24 March 2013. About 235 militants arrived by boats in Lahad Datu, Sabah, Malaysia from Simunul island, Tawi-Tawi, in the southern Philippines.
The conflict killed nine Malaysian policemen and soldiers and six civilians affecting the companies’ plans to build the project’s key infrastructure.
