Petroliam Nasional Berhad (Petronas), through its subsidiary Petronas LNG (PLSB), has formalised a significant equity participation agreement with SMJ Energy.

The deal involves a 25% equity share for SMJ Energy in PFLNG 3, a project company involved in the upcoming shore-based liquefied natural gas (LNG) facility known as the ZLNG project, which will be situated in the Sipitang Oil & Gas Industrial Park (SOGIP).

The heads of agreement (HoA) was signed by SMJ Energy CEO Datuk Dr. Dionysia Aloysius Kibat and PLSB CEO Shamsairi M Ibrahim.

The signing ceremony was attended by Sabah Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor and Petronas president and group CEO Tan Sri Tengku Muhammad Taufik.

The equity acquisition by SMJ Energy will proceed through definitive agreements following the HoA.

The agreement is set to enhance Petronas' partnership with the Sabah State Government and contribute to the responsible development of the state's resources.

This follows a memorandum of understanding signed in 2022 between Petronas and Sabah Oil & Gas Development Corporation (SOGDC) for the ZLNG project’s construction, with SOGDC aiding in securing approvals and utilities as the SOGIP developer.

The new facility is expected to generate multiple benefits for Sabah, including potential future businesses, regional distribution, bunkering and an expanded LNG virtual pipeline system (VPS) in the state.

The LNG VPS will facilitate the extension of gas availability, particularly in Sabah's east coast region.

In a related development, Eni and PETRONAS have signed a framework agreement to create a new company that will manage their combined assets in Malaysia and Indonesia.

The agreement establishes this entity as a financially independent joint venture with equal 50:50 ownership after asset-level valuations.